It has caused a sensation in Pakistan for both the nudity and the initials of Pakistan’s controversial Inter-Services Intelligence spy agency.
Pakistani media have quoted a spokesman for Ms Malik as saying she never took part in such a photoshoot.
But FHM India’s editor told the BBC that nothing had been doctored.
“We have video footage of the shoot as well as emails from Veena about how she’s looking forward to the cover,” Kabeer Sharma told the BBC’s Nosheen Abbas in Islamabad.
He said that the image was intended to be playful, saying that: “In India we joke about this… if anything goes wrong… we say the ISI must be behind this.”
Correspondents say that the image, which is the cover of the December issue of the Indian edition of the global men’s magazine, has caused a storm in Pakistan with many people expressing outrage over the nudity and the boldness of the photo.
The Express Tribune newspaper in Pakistan said a representative of Ms Malik had denied she posed for the shoot.
“Veena knows her limits. I know we have done quite bold stuff/shoots, those which are available on our website, but she knows her parameters,” Sohail Rashid is quoted as saying.
The actress has been at the centre of controversy before.
She caused outrage among conservative circles in Pakistan for appearing on the Indian reality show Bigg Boss in 2010. She hit the headlines again in March this year by challenging the views of a Pakistani cleric on television.