Nearly 3,000 refugees have already fled to India from Sri Lanka
As events in Sri Lanka spiral out of control, India is facing calls from both sides in the conflict to get involved.
Norwegian mediation efforts are apparently struggling and there are fears that war in Sri Lanka could affect regional stability.
The resonance of ethnic conflict would be felt keenly in the southern Indian state of Tamil Nadu, where more than 60 million Tamils reside.
But Delhi remains wary of being dragged back into Sri Lanka's problems, having had its fingers badly burnt in the past.
In recent days, both the Sri Lankan government and the Tamil Tigers have made overtures to India.
Sri Lankan Foreign Minister Mangala Samaraweera was in Delhi last week seeking India's help.
And this week senior rebel leader Anton Balasingham publicly expressed "regret" over former Indian Prime Minister Rajiv Gandhi's killing in 1991.
It was the closest the rebels have ever come to admitting an act which they always denied.
The headlines generated have helped propel the Sri Lankan issue into limelight once again in India.
"Mr Balasingham's regret is a clever move to create confusion in India. But I do not think there will be any major change in India's policy towards the Tamil Tiger rebels," N Ram, Sri Lankan analyst and editor of The Hindu newspaper told the BBC Tamil service.
India was the first country to list the Liberation Tigers of Tamil Eelam (LTTE) as a terrorist organisation in 1992.
Since then, India has pursued a hands-off policy in Sri Lanka's conflict. It has actively encouraged Norwegian mediation while carefully monitoring the situation on the
With the current peace process deadlocked, the focus is now slowly shifting towards possible Indian involvement.
To stay away completely from the conflict could mean Delhi being accused of ignoring problems in its neighbourhood.
Sri Lanka's security has deteriorated badly this year
But, on the other hand, the prospect of getting involved too much brings back bad memories.
Tamil rebels have viewed Indian actions with suspicion ever since Delhi sent in the Indian Peace Keeping Force (IPKF) in 1987 to implement the India-Sri Lanka accord.
Tamil rebels, who were once armed and supported by India, soon ended up fighting the IPKF, which lost more than 1,200 soldiers.
Rebel supporters claim that nearly 5,000 Tamils were killed by the IPKF's military actions in Sri Lanka.
Later, the Indian army faced the ignominy of being asked to leave the country by the then Sri Lankan government, which assumed that it could strike a deal with the LTTE.
But war soon resumed.
Even now Tamil rebels are opposed to India getting militarily involved once again.
But with increasing international isolation, following recent bans by the European Union (EU) and Canada, it seems they need some strategic moves to stem the rot.
India wants a negotiated settlement within a united Sri Lanka, knowing that any fragmentation could have serious ramifications for its own security
And so now they appear to be seeking India's support.
The arrival of nearly 3,000 Sri Lankan Tamil refugees in Tamil Nadu has also brought the issue to public attention in the state once again.
Pro-LTTE political parties and some fringe groups in Tamil Nadu are now trying to whip up emotions by highlighting civilian suffering in Sri Lanka.
They have demanded that the Tamil Nadu government and the federal government in Delhi intervene in support of the Tamils.
The ruling party in Tamil Nadu, the DMK (Dravida Munnetra Kazhagam), is a key ally in the federal government and has expressed support for Delhi's current Sri Lanka policy.
"People of Tamil Nadu have deep sympathy and solidarity for the Sri Lankan Tamils. But they have clearly understood the LTTE. They will never equate the LTTE with the Tamil people," says Mr Ram.
Officially, India wants a negotiated settlement within a united Sri Lanka, knowing that any fragmentation could have serious ramifications for its own security.
So, for the time being Delhi would prefer to maintain its hands-off policy and encourage both parties to continue dialogue.
But public sentiment in India may change if refugee arrivals from Sri Lanka pick up momentum and major political parties in Tamil Nadu start putting pressure on the government.