"The team acted on a tip off from the Sri Lankan Navy that the boat with two armed men would try to cross Indian territorial waters," police quoted Coastal Marine Group police and Intelligence Bureau officials as saying.
The incident occurred at Olaikuda area, they said.
There was an exchange of fire between the two but none were injured and the Sri Lankans managed to go back to their territorial waters, they said.
Following the incident, CMG has intensified patrolling.
Police said naval officials had told them that an enquiry was being conducted into the incident.
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