The arrest of Finmeccanica's chairman and CEO and the prospect that the company could be barred from doing business in India's lucrative defense market is shaking the foundations of the Italian aerospace and defense giant, which already was struggling to restructure in the wake of high debt and declining government spending in Europe.

NEW DELHI — The 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.

NEW DELHI — France is working to ensure that no ripple effect of the Finmeccanica bribery scandal disrupts the long-anticipated contract to supply 126 Dassault Rafale fighters to the Indian air force. “We will do nothing contrary to the principles that we stand for and rules of trade that are based on the principles of competitiveness and fairness,” says French President Francois Hollande, during his two-day visit to India, in which he discussed the estimated $18 billion fighter aircraft deal with Indian Prime Minister Manmohan Singh.