The immigration department's investigation unit had been on the lookout for visa overstayers in the Northern Province, they said.
Most of the 27 Indian nationals were arrested in Jaffna, the provincial capital where ethnic Tamils form a majority of the population.
They were arrested while they indulged in business activities in violation of the conditions of their tourist visas, the officials said, adding that they will be deported soon.
Earlier this month, the ColomboPage reported that three Indians were arrested on August 11 in northeast Sri Lanka for illegally staying in the country.
Their identities have not been revealed.