ROME (REUTERS) - Italy said on Monday that India's relations with Rome and with the European Union could suffer if two Italian marines accused of killing two fishermen are tried under an anti-piracy and anti-terrorism act.

Massimiliano Latorre and Salvatore Girone, part of a military security team protecting a cargo ship off the Indian coast, say they thought the fishermen were pirates and fired shots to warn them off in February 2012.

In a case that has become politically sensitive in both countries, they deny killing anyone or aiming directly at the fishing boat.

India's attorney general said on Friday the two would be tried for the deaths of the fishermen under anti-piracy and anti-terrorism laws but that the death penalty would not be imposed.

"Italy is not a terrorist country," a statement from Prime Minister Enrico Letta's office said.

The Indian supreme court is due to decide later this month to validate or reject the attorney general's request.

"This is a decision that would harm Italy's dignity as a sovereign state," a government statement added.

"...It would bring about negative consequences in relations with Italy and the European Union, with equally negative repercussions on the global fight against piracy."

Charges have yet to be filed against the two marines, partly due to confusion as to which law should be used to prosecute the men, who are on bail but cannot leave India.