India will take "suitable action" against Finmeccanica if graft allegations are proven true, a defense ministry official said, after the company's head was arrested in Italy in an investigation of the sale of helicopters to India.
Italian police arrested Finmeccanica's chief executive Giuseppe Orsi on Tuesday for alleged bribes paid to secure the sale of 12 AgustaWestland executive helicopters to the Indian Air Force, when he was head of the Finmeccanica helicopter unit.
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"We will go to the root of the problem. If charges of bribery are proved, suitable action will be taken," said the official, who declined to be named because of the sensitivity of the matter.
The source added that under Indian defense procurement rules, companies involved in corruption can be punished with blacklisting and fines.
(Reporting by Manoj Kumar and Nigam Prusty; Writing by Arup Roychoudhury)