Indian authorities have launched a murder probe and summoned Italy's ambassador for questioning [AFP]

A diplomatic row has erupted between India and Italy after two Indian fisherman were shot dead in a confrontation between an Italian oil tanker and their fishing boat in waters off the sourthern Indian coast.

Indian police have detained the entire crew, including Italian navy officers, over the killings, while Italy's ambassador in New Delhi was summoned to the foreign office. 

An Indian coast guard official said the naval guards aboard the Enrica Lexie appeared to have mistaken the fishermen for pirates.

"I think they have erred in their judgment. Innocent fisherman should not be fired at, even anywhere, there is no doubt," said Surinder Pal Singh Basra, inspector general of India's coast guard.

Basra said the Italian vessel violated international protocol by not sending any distress signal, which is considered standard procedure during pirate attacks.

He said the incident had occurred on Wednesday in waters off India's southern state of Kerala, and said Indian coast guards had done their duty by bringing the Italian ship to port and detaining its captain and crew.

A murder case has been registered against the crew, said a senior official at a police station in Neendakara Coastal police station, where surviving fishermen sought help.

A foreign ministry official said Italy's ambassador was asked to ensure the crew of the ship co-operated with Indian authorities.

The Italian navy in a statement said on Thursday that the fishing boat had behaved aggressively and had been warned on several occasions by the naval officers aboard the tanker.