Ponnambalam became the political leader of the Ceylon Tamils following the deaths of P. Arunachalam (1924) and his brother P. Ramanathan (1930). He contested the 1931 state council election as a candidate in Mannar-Mullaitivu but failed to get elected to the State Council. He had been unable to contest in his home constituency of Point Pedro due to the boycott organised by the Jaffna Youth Congress. The boycott ended in 1934 and Ponnambalam contested the ensuing by-elections in Point Pedro. He won the election and entered the State Council. He was re-elected at the 1936 state council election.