Last month, over 70 such malnourished children from Manipur, Nagaland and other north eastern states were rescued from a home at Kuzhithurai in Kanyakumari district.
Families, in Manipur in particular, are reportedly sending their children off in the hands of traffickers who have promised to give them an education or employment, reports the Times of India.
It is believed that the children, aged from around six to 15, are being taken to unregistered children's homes where they are kept in poor conditions and made to do menial work like cooking and laundry.
There have been reports of children dying in suspicious circumstances and of others being molested and abused.
"These institutions exploit religion to make money. With many of them not registered with the government, the homes escape scrutiny," Vidya Reddy of Tulir of the Centre for Prevention and Healing of Child Sexual Abuse was quoted as saying by Times of India.
The church has become concerned for the welfare of children in light of the reports.
"This trend is shocking and deplorable," said Dr Hrangthan Chhungi, theologian and Secretary of Commission on Adivasis/Tribals in the National Council of Churches in India.
"It is indeed very ruinous and gross that religion is used for the trafficking business," she said. "Taking the name of Christianity, they lure gullible Christians, specially the parents of poor families or guardians of homeless children and make it a thriving business."
She explained why Manipur is an easy target: "In that state, Kukis are one of the most victimised tribe among the inter-tribe conflicts. These conflicts and killings have rendered children without parents in recent past.
"This sorry situation is taken advantage and made a business by vested interests."
The National Council of Churches in India plans to hold a symposium to raise awareness of child trafficking among churches and NGOs.