Four of the 50 Searcher and Heron unmanned aerial vehicles India purchased from Israel have crashed over the last two years, the Press Trust of India news agency quoted Defense Minister Pranab Mukherjee as telling parliament in a written response.
Director of the Melet factory at the Israel Aircraft Industries Yair Dobster denied the reports and claimed they were untrue.
"These reports are false. Our competitors are apparently attempting to sabotage the IAI's marketing efforts," Dobster said.
According to PTI, Mukherjee said investigations attributed the crashes to systems failure.
Indian defense officials have raised the issue with their Israeli counterparts and the manufacturer, Israel Aircraft Industries, has agreed to repair the drones for free, he said.
"A continuous and multifaceted effort is under way in the defense forces to enhance and upgrade safety of the UAV's," Mukherjee wrote, adding that measures to enhance the quality of training were also being pursued.
In one of the crashes, an Indian air force handler was killed, PTI reported.
Israel has emerged as a leading arms supplier to India, and ties between the countries have warmed considerably over the past five years.
Last year, Israel agreed to sell three PHALCON airborne early warning systems to India. The USD 1.1 billion deal was Israel's biggest one-time sale of military hardware ever.
The Heron UAVs can fly more than 1,000 kilometers (625 miles) at altitudes above 7,620 meters (25,000 feet) for more than 24 hours, according to Israel Aircraft Industries.
The UAVs are deployed along India's border with Pakistan and in the strife-torn Himalayan region of Kashmir, which both South Asian nations claim in its entirety.