Correct. Bagworm, not worm proper.

Hi Natchimuthu:

Is correct, It is a Psychidae caterpillar. In order to ID to species level is necessary to rear the larva to adult,  then you can look at local check lists of Psychidae moths from India like this one in the following link:

https://en.wikipedia.org/wiki/List_of_moths_of_India_(Psychidae)

Good luck,

Luis Miguel

Thank you very much Prof. Jan De Laet for your hint.

Thanks are also due to the valuable information by Prof. Serban Proches and Prof. Luis Miguel Constantino.

I will look out for the other stages also for this caterpillar, so as to find the final confirmation of identification.