Italian defense group Finmeccanica and Indian officials discussed corruption allegations connected with the purchase of 12 helicopters in a meeting on Thursday that both sides said was positive.
The Indian delegation is in Italy to collect evidence relating to allegations that Finmeccanica paid bribes to win the 560 million euro ($750 million) contract awarded in 2010 to its Anglo-Italian helicopter unit AgustaWestland.
An Italian investigation, which escalated last week with the arrest of the then head of Finmeccanica, Giuseppe Orsi, is putting pressure on the Indian government, already buffeted by a string of graft cases.
It has also become a political issue in Italy ahead of parliamentary elections on February 24-25.
Italian prosecutors accuse Orsi of paying bribes to intermediaries to secure the helicopter deal back in 2010, when he was head of AgustaWestland. According to the arrest warrant, the Indian tender was twisted to favor the Italian firm.
India's Prime Minister Manmohan Singh said on Monday the government had nothing to hide.
Orsi has denied any wrongdoing.
Finmeccanica's new chief executive officer Alessandro Pansa, who will attend a board meeting later on Thursday, and an Indian official with direct knowledge of the matter welcomed Thursday's talks.
"A very positive meeting for our side. The company has assured us it will provide all the papers to satisfy our concerns about the allegations... in the shortest possible time," the Indian official said.
India's defense ministry has threatened to cancel the helicopter deal unless Finmeccanica can give assurances that no bribes were paid. Three AW101 helicopters, manufactured in Yeovil in the UK, have already been delivered to India.
Italian financial newspaper MF said on Thursday the group would make a writedown on the Indian helicopters order.
Finmeccanica, Italy's second-largest private sector employer, was not immediately available to comment on the report.
The four-man delegation, led by Indian Ministry of Defense Joint Secretary Shri Arun Kumar Bal and Central Bureau of Investigation official Mahipal Yadav, arrived in northern Italy earlier this week and has already met judge Luca Labianca, who signed off Orsi's arrest warrant.
The Indian official said on Thursday the team would also meet a high-ranking official at Italy's Foreign Affairs Ministry in Rome on Thursday as well as Eugenio Fusco, the Italian prosecutor investigating the case, on Friday.
Finmeccanica's board meeting on Thursday is also set to discuss the long-delayed sale of its AnsaldoEnergia unit but no decision on this issue was expected, a source close to the matter said. Finmeccanica declined to comment.
The group has put AnsaldoEnergia up for sale as part of an asset disposal plan aimed at streamlining the company and avoiding credit rating downgrades.
($1 = 0.7479 euros)
(Editing by Erica Billingham)