Two Italian naval guards accused of shooting dead two Indian fishermen they thought were pirates are to face trial in Kerala as the diplomatic fissure over the incident deepens between the two countries.

Charges have been laid against Massimiliano Latorre and Salvatore Girone, who allegedly opened fire from the deck of Enrica Lexie cargo ship on the crew of a fishing boat in international waters off Kerala in southern India.

Fishermen organisations in Kerala have demanded the immediate arrest of the ship's captain.

"The arrest of the captain of the ship is a must and at no cost should the ship be released," said T Peter, president of the Kerala Swatantra Matsya Thozhilali Federation.

"If there is any move to release the vessel and the captain, we will not allow it. We also demand that the authorities should see that adequate compensation be given to the families of the two victims."

Italian foreign minister Giulio Terzi said there were "considerable differences" with India over the killing of the two crewmen.

"There are considerable differences of a legal character," he said. "I have not seen the co-operation between India and Italy that would be desirable and would allow a quick resolution."

He claimed that as the Enrica Lexie was in international waters, the crew enjoyed immunity from Indian law and any trial had to be held in Italy. Italian officials said the Indian crew behaved aggressively and was warned before the shooting.

But Indian shipping minister GK Vasan said the Italian sailors "cannot be pardoned" and must be punished under local law.

"Our waterfront is not infested by pirates," he told the Hindustan Times. "So it is an unpardonable crime to shoot innocent fishermen thinking they are pirates."

The Kerala state government has authorised a payment of 500,000 rupees (£6,450) each to the dead fishermen's families.