Mr Palaniswami heads the larger faction of the AIADMK, which split weeks after the death of former chief minister and the party's powerful chief J Jayalalithaa in December. O Panneerselvam, who leads the other faction, had met PM Modi last week and offered support to the NDA's candidate for the presidential elections to be held in July when President Pranab Mukherjee's term ends.
Opposition parties are in talks to field a joint candidate for President to take on the government's candidate and in a contest, the ruling NDA will need some help from friendly parties like the AIADMK to make the 51 per cent in the Electoral College needed to win.
The NDA has about 48.5 per cent. Regional parties AIADMK, YSR Congress, Telangana Rashtra Samiti and Biju Janata Dal together have about 12 percent that the BJP hopes to add. It has on its team at least two allies - the Shiv Sena and the Akali Dal - who have in the past not voted for the NDA's candidate for President. The Shiv Sena twice.
The YSR Congress' Jaganmohan Reddy has already met the Prime Minister and offered his party's support.
The Prime Minister, sources said, wants the two AIADMK factions to bury their differences and come together with VK Sasikala, appointed general secretary of the AIADMK after Ms Jayalalithaa's death, and her nephew and deputy TTK Dinakaran left out. Both are in jail for corruption.
A re-merger was initiated last month but stalled immediately over several demands made by the Panneerselvam camp. Chief among them is the official removal of Ms Sasikala and Mr Dinakaran.
Ms Sasikala, who was Ms Jayalalithaa's closest companion, appropriated power in the party after her death and also aspired to the post of chief minister. Mr Panneerselvam who was sworn in chief minister after Ms Jayalalithaa died, was forced to step down to make way for Ms Sasikala and rebelled.
A Supreme Court order convicting Ms Sasikala and sending her to jail prevented her becoming chief minister, but before she left Chennai for the Bengaluru she ensured that her loyalist E Palaniswami became chief minister an installed her nephew TTV Dinakaran as the AIADMK's deputy chief.