This is to be the new proposal put forward by India aimed at settling the long-running fishing dispute between the two neighbours during Peiris' visit to New Delhi beginning on Wednesday, Sunday Times reported.
Peiris will have his first official interaction with his Indian counterpart Sushma Swaraj on Friday, the paper said.
Meanwhile, the Sri Lankan Navy today announced the arrest of another batch of 20 Indian fishermen.
Sri Lanka has repeatedly arrested the Indian fishermen for alleged poaching while President Mahinda Rajapaksa's personal directives had led to the release of some 175 Indians since the advent of the new government since May.
The Kachchativu islet was ceded to Sri Lanka in 1974 by the then Indian Prime Minister Indira Gandhi.
Tamil Nadu Chief Minister Jayalalithaa has been clamouring for the taking back of the islet from Sri Lankan control.