S Krishnasamy, 61, was shot dead on Friday in the office of his party, the Malaysian Indian Congress (MIC), in the southern city of Johor Baru.
Police and the party said the motive behind the attack was not clear.
"I cannot say whether it has something to do with politics, a private matter or in connection with the constituency. An elected representative has many connections," MIC president S Samy Vellu was quoted by state news agency Bernama as saying.
Politics is in turmoil among the minority ethnic Indian population after more than 10,000 Indians staged an anti-government protest in November to complain of racial discrimination.
The activists accused the MIC of selling out their interests.
Vellu said some ethnic Indians were trying to show his party in poor light and that the elected representatives were not working for the benefit of the community.
"When people think we are no longer useful, perhaps a shoot- to kill can occur," Samy Vellu said.
MIC is a senior member of Prime Minister Abdullah Ahmad Badawi's 14-party ruling coalition. Abdullah is widely expected to call snap elections in the coming weeks.