Mani Shankar Aiyar said here late Tuesday at a public lecture.
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Aiyar said India supported moves to put together a "devolution package that could command consensus among the major political parties, restore ethnic harmony and expeditiously address the legitimate aspirations of all sections of Sri Lankan society."
Over the past three decades, more than 60,000 people have been killed in the separatist conflict between the Colombo government and the LTTE.
Israeli-built Kfir jets pounded positions held by the Liberation Tigers of Tamil Eelam (LTTE) in the district of Mannar on Tuesday, the ministry said, adding that the guerrillas had sustained "heavy damage".
However, Tiger rebels fired artillery across the de facto front line in the Jaffna peninsula, killing a soldier and wounding four others, the ministry said.
"Troops retaliated with artillery and small arms, inflicting heavy damage on the enemy," the ministry said.
There was no immediate reaction from the Tigers, but the