"DRDO (Defence Research and Development Organisation) to seek explanation and details from manufacturers of Embraer aircraft on media reports on deal for the aircraft signed in 2008," the principal spokesperson of the Defence Ministry tweeted.
"On receipt of information by DRDO further steps may be initiated," the spokesperson said in another tweet.
The DRDO is fabricating the indigenous AEW&C (Airborne Early Warning and Control)systems that are being mounted on the Embraers, which the Indian Air Force (IAF) will operate.
The system is still not ready as the DRDO has missed several deadlines. It is now scheduled to be completed by December.
According to media reports, Embraer is being probed by prosecutors in Brazil and the US Justice Department over commissions allegedly paid to a UK-based defence agent for clinching the 2008 deal.
The deal, inked by the United Progressive Alliance (UPA) government, involved the purchase of three EMB-145 planes for $208 million. The first aircraft was delivered in 2011, and the other two were delivered later.
According to Brazilian daily Folha de S.Paulo report, Embraer is cooperating with the investigations and announced in July that it was expecting to reach a deal soon with American authorities. The company has put aside $200 million to pay any eventual fines that may result.
"The company has not released details regarding the state of the investigations, but three people who have been following the case have confirmed to Folha that the deals concluded in Saudi Arabia and India are being examined," said the report.
"In both cases, suspicions were underlined in May of this year when an employee with more than 30 years at the company reached a plea-bargain agreement in investigations being conducted by the Federal Public Prosecutor's Office here in Brazil," it added.
The news report also said that Albert Phillip Close, Manager of Embraer's defence section, told Prosecutor Marcello Miller that he had heard a former sales director who worked in Europe admit to American investigators the payment of commissions to facilitate the sale of aircraft to the Saudis.
According to the Brazilian daily report, in India's case, the plea bargainer said that Embraer had contracted a representative to assist in the sale of a surveillance system to the government.
"In 2008, Embraer sold three EMB 145 aircraft to the Indian government. The value of the deal was not announced at the time," it said.
The DRDO has said it is not aware of any commissions being paid for the deal.
This is the second major allegation of graft in a defence deal signed during the UPA regime. A few months ago, there were allegations of commissions and middlemen in what has come to be known as the VVIP chopper scam.
