Sivakumar was on his way to inspect construction work when his car was blocked by the gang at Neravy-TR Pattinam near Tamil Nadu's Nagapattinam district and attacked with sickles, police said.
He was rushed to government hospital, where he was declared brought dead, they said.
67-year-old Sivakumar is survived by wife, two sons and two daughters.
He was the speaker of Puducherry Assembly from 1996 to 2000.
Sivakumar was MLA for five terms - four times on DMK ticket and once as independent - since 1980 representing Neravy-TR Pattinam constituency.He is now with AIADMK.