A few months back, we started fixing the collation rules of Indian languages in GNU C library. Pravin Satpute prepared patches for many languages and I prepared patches for Malayalam and Tamil. Later Pravin enhanced the Tamil patch.
You can read the rules used for Malayalam collation here[PDF document]. Tamil patch was applied to upstream, but the bug is still open since there is some confusion on the results.
Before reading the below discussion, please read the discussion happened in the bug report : [ta_IN] Tamil collation rules are not working in other locales