Sikh separatists are receiving vital funding from the UK which could support renewed violence, police in India have told the BBC's File On 4 programme.
Chief of the Punjab Police, NPS Aulakh, said money was reaching militants from British-based supporters via informal funding channels in the Sikh community.
He said money was being used to attract young people to militant groups.
The authorities fear the resumption of a violent militant campaign from the 1980s and 90s.
Police in the Punjab say they are gathering intelligence that extremist groups pushing for an independent Sikh homeland called Khalistan are getting important donations from UK Sikh supporters.
"We have had some intelligence and from interrogations that some of the people in Britain were involved in funding activities of terror," NPS Aulakh said.
He said the funding was being sent through informal channels in the Sikh community.
"Definitely some of the money was being used to fund militant activities in the Punjab," he said.
He added: "It is very important because that is the way of attracting more and more youth into the fold of militancy - given them money for carrying out militant activities.
"If the funds are dried out, I think militancy can be checked."
Sunny Hudal, founder of the think tank New Generation said the UK's Sikh community had to help curb UK-based extremists and their cash aid for terror tactics.
"The vast majority of Sikhs want nothing to do with them but they must take some of the blame," he said.
"Not enough is being done to root them out," he added.
Some members of the Sikh community told File On 4 they fear the extremists could use Sikh temples the way radical Muslim cleric Abu Hamza radicalised the Finsbury Park Mosque in London.
Hear the full story on BBC Radio 4: File On 4 Tuesday 26 February 2008 at 2000 GMT, repeated Sunday 2 March at 1700 GMT or online at the File on 4 website.