NEW DELHI — The Indian government has initiated actions to scrap its contract for AW101 helicopters with scandal-plagued Finmeccanica subsidiary AgustaWestland. “We have issued a formal show-cause notice to AgustaWestland seeking cancellation of contract and taking other actions as per the terms of the contract and the integrity pact, signed in 2010,” an Indian defense ministry official says.

India's airline market has potential but is beset by myriad problems.

A Finmeccanica bribery scandal has prompted the Indian government to defer a decision on the much-awaited $1.5 billion purchase of 197 light utility helicopters for its military. The defense acquisition council, headed by Defense Minister A.K. Antony, decided to delay a deal for the reconnaissance and surveillance helicopters (RSH) hours after the Indian government ordered a federal probe into alleged corruption in the sale of 12 AW101 VVIP helicopters to the Indian air force (IAF) by AgustaWestland, the helicopter company owned by Italy’s Finmeccanica.