Officials have issued a cyclone alert at ports in the eastern state of Orissa and begun preparations for mass evacuations amid fears of flooding.
Authorities in Bangladesh have also warned fishing boats to stay close to shore and not to venture into deep water.
India is battered regularly during the stormy season in the Bay of Bengal between April and November.
Last year, 169 people were killed by Tropical Cyclone Aila. Millions more living in India and Bangladesh had their lives disrupted.
And last month, a nor'wester – large storm systems that develop in the Bay of Bengal during the summer – struck the states of Bihar and West Bengal, killing 137 people and leaving thousands of people homeless.
The latest cyclone, named Laila, is gusting at up to 40mph but is still some 400 miles east of Chennai.
Forecasts suggest it could reach speeds of 120mph and – if it continues on course – hit land on Thursday in Andhra Pradesh, home to steel plants and oil refineries and ports.
"The system is likely to intensify into a cyclonic storm and move initially in a north-westerly direction towards Andhra Pradesh coast," said a statement issued by the The India Meteorological Department.
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