The Tamil Nadu Police Idol Wing called for National Gallery of Australia to return a 900-year old status of Dancing Shiva to be used as evidence in a million-dollar art looting case in New York.

New York art dealer Subash Kapoor is facing trial of robbing two ancient temples in India. He then sold his loots to different art galleries, including NGA.

NGA purchased the statue of the Dancing Shiva back in 2008 for five million dollars.

According to Tamil Nadu Police, the statue, if returned, will be the major evidence against Mr Kapoor.

"[The idol] plays one of the most important roles. As far as the police are concerned it is one of the [pieces of] evidence that the idol was stolen and illegally sold out so we will have to get it back," police investigator Ashok Natarajan told ABC.

Police said that NGA should have observed sound discretion and recognised that the statue as old as the Dancing Shiva was illegally exported from India.

"When they know pretty well that it was stolen from this place where I am now standing, which is now in their custody. Morally, and otherwise, I hope they realize and they will be magnanimous enough to return back the idols," Mr Natarajan said.

"Certainly what they have done is very superficial. They have just referred to this Art Loss Register and a few irrelevant documents. They could have also verified that the provenance provided by Mr Kapoor is a genuine one or is a forged one - they could have easily done it. It doesn't require too much of effort to put in," Mr Natarajan emphasised.

ABC found out that even the locals were devastated knowing that the statue was stolen.

Local village man Bala told ABC that the whole village cried incessantly.

"Everybody cried and kept on mourning. Since that statue left our village we have been feeling like we have lost our mind," Bala said.

The statue was the most important piece inside the temple. Locals would carry the statue on their shoulders and parade it to the streets during festivals.

"We would like to have our statues and deities back. We want to do the annual prayers to the gods and the whole village will bless the person who helps get our statues and deities back," Bala added.

However, retiring NGA director Ron Radford said that NGA decided not to return the statue until presented with more concrete evidence that it was stolen. He said that the purchase of the statue from Mr Kapoor was done in good faith and all documents were properly checked.

"The negotiations went on for a year as we were testing whether it had been stolen from anywhere or it's provenance and we were checking all of that with great thoroughness," Mr Radford told ABC.