The Defence Ministry may demand a CBI probe in the deal for Embraer aircraft following reports of alleged kickbacks having been paid, sources said on Wednesday.
In 2008, Embraer sold three EMB 145 AEW&C (Airborne Early Warning and Control) aircraft to the Indian government. The deal was worth $208 million.
On Sunday, Defence Minister Manohar Parrikar hinted that the deal may be handed over to CBI for investigation.
"I am not going to give a knee-jerk reaction and just make a statement based on rumours. I have asked for a report, which will be submitted on Monday, and if the issues are of a criminal nature, then we can forward this case to the CBI for a criminal investigation. If there are just procedural issues, then we can do an internal investigation," Parrikar had said.
Earlier, DRDO had sought explanation from Brazilian aerospace conglomerate Embraer over alleged kickback payment in a deal for aircrafts entered into during the UPA regime, Defence Ministry said.
The issue came to the fore after a report in a Brazilian newspaper said that investigations have been opened by the government of the United States to establish whether Embraer paid bribes in order to obtain contracts abroad.
According to the report, the company has been under investigation by the US Justice Department since 2010 when a contract with the Dominican Republic raised the Americans' suspicions. Since then, the investigation has widened to examine business dealings with eight more countries, including India and Saudi Arabia.