The Times of India reports that the caterer is a leading supplier in the US, also having top international airlines as clients. A source said: "The caterer who supplies to Air India has Air France, British Airways and Lufthansa as its clients. This caterer was chosen because of the strict quality control followed by him. This lapse is not acceptable. We will take up this issue with US authorities."
According to the BBC, it is unclear whether the creatures discovered in the sandwich were worms or maggots.
Air India has been hit by a string of issues over the past few months. On Saturday, a large panel in the underneath of an Air India jet reportedly fell off in mid-air, putting 150 passengers on board at "grave risk", reports the BBC.
A senior Air India pilot was also this year suspended after being caught drunk just before flying.
In January, another Air India pilot was facing the possibility of losing her job after refusing last-minute orders to change flights - because she'd arranged to pick up her favourite dumplings on the original route.
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