Italian defense group Finmeccanica's subsidiary AgustaWestland denied on Saturday that India had cancelled a $750 million order for a dozen helicopters and said authorities had asked for "clarifications" within a week's time.
On Friday, the Indian defense ministry said it had begun the procedure to cancel the order.
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"The Indian Ministry of Defense has not cancelled the contract but has given notice requesting information within seven days," AgustaWestland said in a statement.
"AgustaWestland is preparing its answer to timely meet the Indian authorities' request."
The British-based subsidiary said it was confident it would prove that all its past and present managers had conducted themselves in accordance with the law.
India has frozen payments for the AgustaWestland helicopters pending an inquiry after Italian police earlier this week arrested the former head of Finmeccanica , Giuseppe Orsi, for allegedly paying bribes to Indian politicians to win the contract.
Three of the helicopters have already been delivered.
India launched its own inquiry after Orsi's arrest and investigators are due to travel to Italy next week to find out more about the case.
Finnmeccanica could be blacklisted in India for five years if found guilty of bribery. Defense analysts IHS Jane's says Finmeccanica has been pursuing opportunities in India valued at more than $12 billion in 2013.
(Reporting by Frank Jack Daniel; writing by Jessica Donati; editing by James Jukwey and Helen Massy-Beresford)