The Crown opened its case on Monday before Judge Greg Hollister-Jones.
Nallella took the stand today explaining to the jury why he lied.
He said he grew up in India where it was common for police to beat and lock people up they didn't like. He said he was scared when three police officers arrived at his house and told him he was under arrest.
"My heart was beating so fast."
Nallella said he feared for his job if he made any admissions and instead lied to police and said nothing sexually happened.
The court heard police charged Nallella after DNA results showed it was likely to be his saliva that was found inside the woman's bra cups.
Nallella said in evidence he was concerned about lying to police after giving a DNA sample and sought legal advice. A lawyer, Tim Braithwaite, told him to "stay calm and not say anything" so he didn't go back to the police and admit he had lied, Nallella said.
After he was charged, he admitted to police he had sexual contact with the woman but said she initiated it and consented.
Under cross-examination from Crown prosecutor Anna McConachy, Nallella denied he was "somewhat of an accomplished liar".
Nallella repeatedly said he knew he had not done anything wrong but he was scared to admit a sexual encounter had taken place.
When questioned by McConachy about whether he was attracted to the woman, Nallella said he wasn't in the sense of a relationship but he was happy to have sexual contact with her because she initiated it and consented.
McConachy questioned Nallella about the woman telling him in the bedroom she had been previously sexually abused and therefore didn't "do sexual things" with men.
Nallella said the woman did tell him that and he comforted her by saying she would find someone who would deserve her.
Nallella said the woman then turned her head to him and started kissing him. He said she helped him take off her clothes and she clearly consented to the sexual activity.
Nallella's lawyer, Andrew Schulze, called lawyer Tim Braithwaite to give evidence.
Braithwaite told the court he asked Nallella why he had lied to police in his first interview and Nallella told Braithwaite his cultural views of police from experiences in India.
Braithwaite said his advice to Nallella was not to go back to the police and admit anything and instead do nothing until he was charged.
Schulze read an affidavit from a woman called Melissa Muir, a German national who had lived in Rotorua but had since gone back to Germany.
In it Muir said she met Nallella at Migs gym. She said they also had coffee at Rotorua Central in August 2017 and she agreed to go back to his house.
She said they talked, played cards and Chess for about three to four hours before she left.
She said she had since been alone with Nallella up to 20 times and had never felt uncomfortable.
Judge Greg Hollister-Jones is expected to sum up the case for the jury tomorrow.
