On the second day of his video-linked testimony from an undisclosed location in the US, the Pakistani-American claimed on Tuesday Lashkar-e-Taiba (LeT) militants planned to attack on a meeting of Indian defence scientists at the Taj Mahal hotel about a year before they struck on 26/11.
The Express Tribune reported that Mr Malik, who was interior minister when Mumbai attack occurred, accused India of trying to defame Pakistan by concocting confessions out of Headley.
"His confessions are all a pack of lies and fabricated statements," Mr Malik, who heads the Senate's Standing Committee on Interior and Narcotics Control, said.
Brushing aside all "allegations levelled by India against Pakistan for ulterior motives", the former PPP lawmaker claimed Headley was "planted" by Indian intelligence agency for "executing the Mumbai attacks and then getting concocted statements from him".
"We have the details about who paid tickets, who funded him and how he recruited non-state actors from Pakistan [for the attack]," Mr Malik claimed.
Headley, 55, was jailed for 35 years in 2013 by a Chicago court for his role in the November 2008 Mumbai attacks.