The violence was triggered by a court decision on Monday that asked the southern state of Karnataka to divert some water from the Cauvery river to neighbouring Tamil Nadu state.
The Karnataka government has imposed a curfew - an exceptional move although not unprecedented - on sensitive areas of Bengaluru until Wednesday (14 September).
While Bangalore was calm on Tuesday, angry protests were staged along the 150-km highway from the capital to the city of Mysore.
Expressing concern, she said "hotels and properties belonging to Tamils in Karnataka are being attacked and damaged".
Incidents of arson came even as police said they have made elaborate security arrangements with 15,000 policemen being deployed, bolstered by Karnataka State Reserve Police, City Armed Reserve Police, Rapid Action Force, Quick Reaction Teams, special forces, Central Industrial Security Force and Indo-Tibetan Border Police Force.
One person was killed and another injured in police firing in Karnataka Monday as the Cauvery water sharing row with Tamil Nadu turned violent, escalating tensions between the two states. It modified its September 5 order and reduced the amount of water to be released per day from 15,000 cusecs to 12,000 cusecs, but extended the number of days.
"All these losses would run between Rs 22,000 crore and Rs 25,000 crore, besides of course huge damage to the goodwill of the state as an attractive investment destination" it said ASSOCHAM urged the Centre to effectively monitor the situation and ensure that peace is restored in the two states.
Further the petitioner also sought the court's direction to both states to act against all those people who have indulged in violence. E-commerce majors, Amazon and Flipkart also faced the brunt of the unrest as their operations had been affected severely.
Earlier in the day, it was tough to make out whether Section 144 in the state was imposed or not as the state DCP was seen saying on news channels that it has been imposed, but the Bengaluru police was denying it.
Relative calm has been restored to the Indian city of Bangalore following the deaths of two men amid riots over an ongoing water dispute. Schools and colleges were also shut due to the protests.
Most parts of Karnataka remained violence-free though police resorted to lathi charge in some places, while the curfew has been extended by another day. As per reports, it was reported that the Kannada Chaluvali Party said a railways bandh will be held throughout the state.
"Situation that has emerged in Karnataka & Tamil Nadu, as a fallout of issue of distribution of waters of Cauvery River, is distressful". National carrier Air India said it would not charge any fee for cancellation of a ticket or rescheduling of its flights to and from Bengaluru and Hubballi upto September 16.
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