On 18 July 2012 he has been included in 30 probables for the World T20 tournament to be played in Sri Lanka in September 2012. He has also found his way into the national squad after a gap of three years.
Lakshmi Balaji became a member of the Indian cricket team in 2003. Playing for his state team since 2001, he made his Test debut against New Zealand at Ahmedabad in 2003. He was recognised after his performance in the 2004 India Pakistan series. In that series, he played a significant part in Indian team's historic victories. But after an injury, his international cricket career was put on hold. He made a comeback in Pakistan's 2005 tour of India, taking 5 wickets in the first innings. Injury kept him out of cricket for the next 3 years. Balaji made his return to domestic cricket in 2007. After a strong 2008 domestic season where Balaji was instrumental in helping Tamil Nadu reach the Ranji Trophy semifinals, Balaji was called up to the international squad in January 2009 to replace an injured Munaf Patel who sustained a groin injury. Balaji was included in the playing XI for the final match of the series against Sri Lanka. India went on to lose the match. Balaji was rested for the subsequent Twenty20 match. In February the BCCI announced that Balaji had been dropped from the ODI squad to tour New Zealand but had been selected for the test squad. Thus marking Balaji's return to the test squad after a five year hiatus having last been part of the test squad in the 2004 series against Pakistan.
On 18 July 2012 he has been included in 30 probables for the World T20 tournament to be played in Sri Lanka in September 2012.And subsequently was selected in the final 15-member squad.He made his comeback into the Indian side in the second T20 International against New Zealand at his home ground-Chennai.
Balaji played for the Chennai Super Kings team in the 1st 3 editions of the IPL starting from the 2008 Indian Premier League. On 10 May 2008, he picked up the first hat-trick of the IPL tournament in the match against Kings XI Punjab at Chennai, and rounded off the evening with a match-winning five-wicket haul. His tournament was to end on a low as he bowled the final over to Shane Warne and Sohail Tanvir, with the latter hitting the winning runs off the final ball. Since his successful spinal operation in England by Prof. John Dowell he has returned to full form. Balaji has been notably consistent for the economy rate in all T20 matches in the IPL Chennai Super Kings as the normal matches of T20 seldom had run chases below or near 130 . He has not done much in the batting side of IPL.
In the 3rd season of IPL, Balaji played 7 games and picked up 7 wickets. After Chennai Super Kings won the tournament and went on to play the ACLT20, Balaji played most of the games in the tournament and his economical bowling was praised by the captain of the Indian team, MS Dhoni and was listed by him as one of the reasons to CSK's victory in the tournament.