Fr Tom was abducted in March by gunmen in Yemen with reports over Easter claiming he had been killed by Islamic State militants.
However, the Indian government has now confirmed he was taken by anti-government rebels in Yemen and is still alive.
Speaking to India's New Delhi Television (NDTV) station, the official said: "It is now clear that the priest is not in the custody of the Islamic State terror group but with anti-government forces in Yemen.
"Last minute efforts are underway and his release is imminent."
Reports suggest church officials have spoken to Fr Tom but this has not been confirmed.
The development comes just weeks after Pope Francis called for his release.
In an address at the Vatican, he said: "Of all kidnapped persons in armed conflict zones, I wish to remember Salesian priest Tom Uzhunnalil, who was abducted in Aden, Yemen, last March 4."