The shocking incident occurred at around 2.30 AM at Sunped village on the outskirts of Delhi, police said, adding two persons have been arrested.
11 persons, including a father-son duo, have been booked on murder, rioting and other charges, a police spokesman said.
Vaibhav, who was two-and-a-half years old, and his sister, 11-month-old Divya, died after the attackers allegedly poured petrol from the window and set the house ablaze while the family was sleeping inside. A religious programme was being held nearby in the village at that time.
Concerned over the attack on the Dalit family, Home Minister Rajnath Singh spoke to Haryana Chief Minister Manohar Khattar over phone asking him to ensure security to everyone and prevent any recurrence of such incident, officials said in Delhi.
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The Union Home Ministry also sought a report from the state administration.
A compensation of Rs 10 lakh has been announced for the family by the Haryana government, state officials said.
Jitender alleged that the attackers were from Rajput caste and the family had a confrontation with them over a murder in October after which a case had been registered.
"They had threatened that they will finish my family, that I should never return to the village... I won't but please give me back my children," he said.
The incident has led to tension in the area and security has been tightened. Subhash Yadav, commissioner of police of Faridabad, reached the village and is monitoring the situation.
"Two persons have been arrested," the police spokesman said.
An SC/ST Commission team met the victims' family and assured them that they will get justice.