A former BBC journalist, Vinod Verma, has been arrested in the northern Indian state of Uttar Pradesh.
His arrest is connected to a scandal about a supposed sex tape involving a Chhattisgarh state politician.
A police spokesman told the BBC that Mr Verma was suspected of extortion, and another said 500 CDs had been recovered from his house.
Mr Verma denies the extortion allegation, saying he is being "framed" as he has a copy of a sex video.
He says he has it on a pen drive. "I don't have any CDs," he said.
Reports suggest that the alleged sex tape concerns a member of the ruling Bharatiya Janata Party (BJP). It was a member of the BJP that filed a complaint that led to Mr Verma's arrest.
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The BJP said the sex tape was a "fake" that had been engineered by its opponents for "narrow political gains", and accused Mr Verma of trying to tarnish the image of the party.
"We are open to any investigation," said spokesman Dharamlal Kaushik.
But an opposition Congress Party spokesman, Bhupesh Baghel, told the Hindustan Times newspaper that the BJP was "trying to snuff out the issue".
"Possessing a CD is not a crime," he said.
"I also have the CD, but it was not released since we are examining the forensic credibility of the CD."
He said the scandal had erupted last week.
Mr Verma, who was arrested in the early hours of Friday at his home in Ghaziabad, has reported extensively from insurgency-affected Chhattisgarh.
Chhattisgarh is a stronghold of armed Maoist rebels who say they are fighting for the rights of the poor.
Journalists often face intimidation both from the authorities and the rebels in the state.