Rome has called back its ambassador to New Delhi escalating the diplomatic row with India over the arrest of two Italian marines who face charges of killing two fishermen off the Kerala coast in southern India.

"This measure is the limit and what's even bigger is the indignation that has hit the whole nation and cannot fail to spread to the entire international community," said Italian foreign minister Emma Bonino, adding that the envoy will be flying back for "consultations" on the matter.

She added: "Given India's evident incapacity in handling this case, Italy will continue and intensify action to defend its sovereign rights in line with international law. Italy's main aim remains trying to obtain the return of the two marines as quickly as possible."

Ambassador Daniele Mancini is expected to leave immediately.

The two Italian marines, Massimiliano Latorre and Salvatore Girone, are currently sheltered in the Italian embassy in New Delhi. They claim that they mistook the slain fishermen for pirates while defending a cargo ship.

The incident that took place in 2012 had created a diplomatic storm between the two countries with both sides heaping scorn on each other.

Italian authorities have been lobbying the UN and the European Union for getting the case transferred to Italy, claiming the firing took place in international waters, but New Delhi argues it took place in Indian territorial waters.