The Indian army has shown to the media a top rebel leader who had been reported killed in recent fighting in neighbouring Bhutan.
Some 6,000 Bhutanese troops have been deployed in the offensive
Bhimkanta Buragohain, the founder of the United Liberation Front of Assam (Ulfa), was said to have died in a clash with the Bhutanese army last week.
More than 130 people have died since the Bhutanese army launched its first offensive against three Indian rebel groups on Monday.
The rebels have for years used Bhutan as a base to strike against India.
Buragohain was shown by the Indian army in the north-eastern state of Assam, where he urged his supporters to lay down their arms and begin talks with the Indian Government.
"I think from my side, the path which we led is wrong.
"Armed rebellion cannot bring independence," the 78-year-old rebel leader said.
The Indian army says Buragohain was handed over to them by the Bhutanese Army on Thursday.
Buragohain, launched the Ulfa in the north-eastern Indian state of Assam in 1979.
Several senior leaders from three Indian rebel groups were earlier reported to have been killed or arrested by the Bhutanese army.
The three rebel groups involved in the fighting are Ulfa, the National Democratic Front of Bodoland (NDFB) and the Kamtapur Liberation Organisation (KLO).
Ulfa is fighting for Assam's independence from India while the NDFB and the KLO are fighting for separate tribal homelands.
About 6,000 Bhutanese troops have destroyed almost all of the 30 rebel camps in the country during the offensive, officials say.
The camps were said to have sheltered about 3,000 rebels.