Intelligence officials on Wednesday questioned local fishermen to verify reports that their boats had been used by the Liberation Tigers of Tamil Eelam to attack a Sri Lankan Navy vessel.
Ten boat owners have been detained in Rameshwaram in Tamil Nadu for questioning, the officials said.
A Coast Guard official said fishermen lending their boats to the LTTE could not be ruled out as they cannot undertake fishing in Sri Lankan waters without the help of the Tigers.
"The LTTE paid rent for their boats and also allowed them to fish in the area where plenty of fish was available. The LTTE is using a carrot and stick policy so that the fishermen had no option except to help them," the official told PTI on condition of anonymity.
The attack reportedly took place yesterday near Iranativu in the Sri Lankan waters.
Meanwhile, fishermen in Rameswaram today stayed away from fishing to protest the detention of some of their colleagues for questioning.
Sri Lankan Navy had on Tuesday said in Colombo that its boat was fired upon and sunk by a boat that came along with a cluster of Indian fishing vessels in the Gulf of Mannar.