Here are the top 10 developments in this big story:
Mr Mallya was arrested today at about 9.30 am London time (3 pm IST). Scotland Yard said in a statement that, "Officers from the metropolitan police's extradition unit have this morning arrested a man on an extraction warrant. Vijay Mallya, 61, was arrested on behalf of Indian authorities in relation to accusations of fraud."
"Usual Indian media hype. Extradition hearing in Court started today as expected," Mr Mallya tweeted a while back.
India had made an extradition request in February to Britain to send back the businessman to face trial after he fled the country on March 2 last year, owing more than 9,000 crore to state-owned banks. Mr Mallya defaulted on the loan payments and alleged misusing of funds.
The Foreign Ministry had lodged the formal extradition request with the British High Commission in New Delhi after investigators demanded that Mr Mallya be brought home to face charges of financial fraud and defaulting on loans.
Last month, the British Secretary of State certified the extradition request. Mr Mallya is in Britain on an "indefinite leave to remain" visa or on permanent residence.
The businessman faces at least half a dozen arrest warrants back in India. Last week, a Delhi court put out an open-ended non-bailable warrant against Mr Mallya in a case of alleged violation of foreign exchange rules.
Mr Mallya, a liquor baron known for a lavish lifestyle, has repeatedly refused to appear before courts and investigators in India. On Twitter, he has defended himself, dismissing the charges against him.
Cases against him are being investigated by the Central Bureau of Investigation and the Enforcement Directorate, which handles financial crimes.
Earlier this year, Mr Mallya was sacked from the board of United Breweries, the firm through which he once controlled his business empire. He made Kingfisher beer a global brand and ran a now-defunct airline with the same name, besides being the owner of a cricket team and a Formula One team.
In January this year, the Debt Recovery Tribunal ordered a State Bank of India-led consortium of banks to start the process of recovering the loans that Mr Mallya owes them by attaching his properties.