Worldwide, reef building corals are being degraded due to increasing anthropogenic pressure, and as a result, macroalgal cover is being increased. Hence, mechanism of coral-algal interaction, differential coral response to algal overgrowth, is critical from every geographical location to predict future coral dynamics. This paper documents the frequency of coral-algal (Halimeda) interactions, differential coral response to algal interaction. We found difference in susceptibility among coral genera to competitive effects. Out of 970 coral colonies surveyed, 36.7% were in contact with Halimeda sp. Most frequent contact was observed in Porites (57%) followed by Favites 28% (n=60), Acropora 26% (n=48), Platygyra 5% (n=5) and Symphyllia 4.2% (n=3). Frequent discoloration and tissue loss were only observed in Porites. Continuous monitoring revealed that long-term algal physical contact prevents light required for polyp for photosynthesis and stops coral feeding ability. In this study, we also found mutual exclusion between Halimeda and coral recruit. Out of 180 coral colonies (size class between 5 and 15cm) comprised of Favites (n=74), Acropora (n=20), Favia (n=79) and Porites (n=7) surveyed, none of them were found in Halimeda-dominated sites. The documented effects of recruitment exclusion and tissue mortality followed by algal interaction on major reef building corals (Porites) could affect replenishing process and health of the remaining healthy corals in the Palk Bay reef if algal proliferation rate is not controlled through proper management strategies.