Rushdie's novel "The Satanic Verses" has been banned in India since it was published in 1988 and he has long been a target of Muslim extremists who condemn the book as blasphemous.
Rushdie was confirmed to attend the Jaipur literary festival, but backed out last week just before it started because he said Rajasthan police told organizers two assassins had been hired by a known Islamist to kill him.
The director-general of the Maharashtra police, which handles organized crime in the country, denied any knowledge of the alleged plot to The Hindu newspaper during the weekend.
The denial prompted Rushdie to take to Twitter Sunday and complain: "I've investigated, & believe that I was indeed lied to. I am outraged and very angry," the Daily Telegraph newspaper in London said.