Another clinical research organisation, Quest Life Sciences of Chennai, is in trouble over defective trials work, according to a warning issued by the World Health Organization.
The action by the United Nations health agency follows an earlier scandal over drug testing at GVK Biosciences, which resulted in approvals for hundreds of generic drugs being withdrawn in Europe.
India's drug industry, a source of cheap generic medicines to countries worldwide, has been tarnished in recent years by a series of quality problems at various companies, including manufacturing and clinical data shortfalls.
In the case of Quest, the World Health Organization (WHO) said there had been "critical" lapses in a trial of HIV drugs, including the fact that two-thirds of patients' electrocardiograms (ECGs) turned out to be duplicates.
"Subject details ... and dates had been changed by the company, in the majority of cases, to make the ECGs appear as if they were from each of the different subjects," it said.
The WHO inspectors also criticised the standard of record-keeping in the trial, including apparent attempts to hide documents from inspectors.
The WHO, which checks on medicines used by UN agencies like UNAIDS and UNICEF, issued a "notice of concern" to Quest last week.
Joseph Kamlesh, Quest's head of operations, told Reuters the issue was isolated and could not be compared with the problems at GVK, which concerned multiple regulators.
"We expect this issue will be resolved in six months. We have not lost any contracts or clients, we have a very good relationship with them," he said.
Quest has around 100 clients that it serves on and off, but for the past two to three years it has been working for 25 companies, he added.
Its work has been used to support drug applications in Europe, the United States, Australia, Russia, South Africa and the Philippines, according to its website.
Kamlesh said that since the WHO's surprise audit of its facilities last October, it had also been visited by US, British and Spanish regulators.
"The FDA (US Food and Drug Administration) has cleared our plant after making some initial observations, while the Spanish and UK authorities are yet to issue a final response," he said.
Quest's trial of HIV drugs was carried for India's Micro Labs, which was itself the subject of a WHO "notice of concern" in 2014. Micro Labs officials were not immediately available.
The Indian pharmaceutical contract research market is expected to reach $1 billion in 2016, from $485 million in 2012, according to consultants Frost & Sullivan. But some executives fear it could be undermined by reputational issues.