Italian defence group Finmeccanica's subsidiary AugustaWestland on Saturday denied 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 defence ministry said it was seeking to cancel the order.

"The Indian Ministry of Defence has not cancelled the contract but has given notice requesting information within seven days," AugustaWestland said in a statement.

"AgustaWestland is preparing its answer to timely meet the Indian authorities' request."

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.