External Affairs Ministry spokesman Sarath Dissanaike told Xinhua that the Sri Lankan embassy in Indonesia and the Sri Lankan High Commission in Australia were monitoring the situation and were awaiting confirmation if those on board were indeed Sri Lankans.
Up to 200 illegal asylum seekers were on board the vessel, which was on its way to Australia, when it capsized on Thursday.
The Australian media quoted West Australian Police Commissioner Karl O`Callaghan as saying about 40 people were spotted on the upturned hull, others were in waters and up to 75 may be dead.
Ships from both Australia and Indonesia were dispatched to the scene to rescue those who survived and recover the bodies.
"We have seen through the media that most of them maybe Sri Lankans but we still don`t have an official confirmation," Dissanaike said.
Hundreds of Sri Lankans, mostly minority Tamils, have over the years managed to reach Australia by boat to seek asylum with most of them claiming conditions are home is not safe for them.
The Sri Lankan government however insists that with the end of a 30 year war against the Tamil Tiger rebels three years ago the country is safe for the Tamils and those making asylum claims overseas should not be accepted.
The Sri Lankan police last month arrested 113 people while they were attempting to go to Australia by boat illegally while earlier this month the Sri Lankan navy arrested 53 illegal asylum seekers who were also heading to Australia.
Sri Lanka and Australia have an agreement to combat human smuggling. (*)