An Indian court has rejected a request by Rome to allow an Italian expert to be present during forensic examination of arms seized from the ship Enrica Lexie, whose guards have been accused of shooting dead two Indian fishermen mistaken as pirates.

The same court allowed Italian representatives to be present during the unsealing of the ship's weapon boxes and ballistic tests, however.

Italian foreign minister Giulio Terzi di Sant'Agata offered a compensation package to the families of the dead fishermen during a meeting with his Indian counterpart SM Krishna to "clean the air".

But the two countries have struggled to overcome broader differences. There have been indications that Rome may consider an out-of-court settlement to resolve the issue.

Italy insists that the Italian naval guards Massimiliano Latorre and Salvatore Girone, who allegedly opened fire from the deck of their cargo ship on the crew of a fishing boat in waters off Kerala, must be tried under international law. New Delhi insists that they should be tried under Indian laws.

"I have explained frankly the position of my government on the legal aspect of this issue. There is a difference of opinion which is not resolved," Terzi said.

"We hope to pursue the matter in a friendly spirit, understanding and cooperation. Our sailors in Kochi have been the victims of the same reason that caused the death of two Indian fishermen, the threat of piracy."

But Kerala's chief minister Oommen Chandy said that the criminal case against the naval guards could not be settled out of court. "Trial will have to take place," he said.

Latorre and Girone have been charged with murder by a criminal court in Kerala.