Indian troops, sent in by ex-Congress premier Rajiv Gandhi to enforce a peace deal on the island, ended up battling the Tigers.
New Delhi withdrew its soldiers in 1990 after 32 months in which it lost at least 1,200 men.
India banned the rebels after Gandhi was assassinated in May 1991 during an election rally in Tamil Nadu by a Sri Lankan Tamil separatist woman suicide bomber.
The statement came as troops appeared on the verge of crushing the rebels' 37-year campaign for an independent Tamil homeland after a series of battlefield victories across northeast Sri Lanka.
"India is ready to facilitate the evacuation of civilians trapped in the area of conflict," Foreign Minister Pranab Mukherjee told parliament.
While stressing the importance of a "negotiated political settlement" acceptable to all communities in Sri Lanka, Mukherjee accused the Tiger rebels of inflicting "much damage" on the wider Tamil community.
Sri Lanka's Tamils share close cultural and religious links with the 6