New Delhi and Rome are facing a full-blown diplomatic crisis with Indian Prime Minister Manmohan Singh threatening Italy with "consequences" if two Italian Marines - accused of killing two Indian fishermen off the coast of southern Kerala last year - are not sent back to stand trial.

The two marines, Latore Massimilano and Salvadore Girone, were arrested in southern Kerala on February 19, 2012, for opening fire at an Indian fishing vessel from onboard an Indian-flagged vessel, the MV Enrica Lexie, which was traveling from Singapore to Egypt. The marines said they said mistook the boat for a pirate craft. While Italy maintains that the shooting occurred in international waters and that Rome should have jurisdiction, India has been unequivocal that the incident transpired in Indian territorial waters and hence the marines ought to be tried within the country.

The two were allowed by India's Supreme Court last month to go home to vote in Italian parliamentary elections after Rome's envoy to New Delhi, Daniele Mancini, submitted an affidavit taking full responsibility on behalf of the Italian government of ensuring the return of the marines to India four weeks later.

However, earlier this week, Rome notified Delhi that since the two countries had a dispute on the interpretations of the United Nations Convention on Law of Sea 1982, their marines will not return to India now - that India's decision to try the pair would violate their rights, in particular the principle of immunity for foreign state actors. Italy's volte face has Delhi politicians frothing at the mouth.

"Our government has already made it clear that these actions of the government of Italy are not acceptable," PM Manmohan Singh told Parliament Thursday. "They violate every rule of diplomatic discourse and call into question solemn commitments given by accredited representatives of a sovereign government to our Supreme Court."

"Rome's decision to not return the marines does not behoove a responsible state," The Indian Express editorialized. "Italy has been insisting on a diplomatic resolution to the matter as per the UN Convention on the Law of the Sea. But with this breach of trust, it has severely shrunk the diplomatic space for finding a mutually acceptable resolution to the problem."

India is in the midst of a full review of diplomatic ties with Italy and there is even talk freezing all official contacts with Italy. The country's ambassador has been refused permission to leave the country. "The only discussion with Italy will be on this case," says a foreign ministry source.

Domestically, the furor has provided grist for the Opposition parties' mill. The rival parties have launched a scathing attack on what they call the ruling UPA government's "soft" stance. Oblique references are also being drawn to the Congress party-led UPA combine's traditionally soft stance on Italians due to the fact that UPA Chairperson Sonia Gandhi was born and raised in Italy.

Ghosts of the past are also being recalled. The Gandhis were also under attack in the 1980s when an Ottavio Quattrocchi, an Italian businessman who was implicated in a massive arms scandal on the sale of Bofors armaments to India, fled Indian law allegedly with help from the Gandhis (Sonia's husband Rajiv Gandhi was PM then). Quattrocchi was allowed to slip out to Malaysia in 1993 and although India tried to get him extradited from Malaysia and Argentina, its requests were rejected. In 2011, a court allowed the CBI's plea to withdraw case against Quattrocchi.

Recently, Rome's refusal to share with Indian investigators information about the probe into Finmeccanica for alleged bribery in its UK-based subsidiary AgustaWestland's deal to supply 12 civilian helicopters to the Indian Air Force, has further strengthened the public perception that Italy continues to cock a snook at Indian regulations as the country enjoys proximity to the powers-that-be.

The dispute, say analysts, has damaged bilateral relations irreparably even though Indian Foreign Minister Salman Kurshid has given an assurance that the matter "will be treated with urgency".

Italy's recalcitrance is being interpreted in diplomatic circles as yet another ignominious snub for India, one in a long line of recent humiliations by many of its international partners. The Maldives have been openly flexing their muscles in the Indian Ocean while an aggressive Beijing has been claiming water from the Brahmaputra, encroaching into India's eastern Arunachal Pradesh and building Gwadar port in Pakistan and Kyaukpyu in Myanmar. Even tiny Sri Lanka - virtually a hundredth of India's size - is openly blocking imports from India, especially automobiles. Pakistan, India's nuclear-armed eastern neighbor, struck again this week, killing four Central reserve Police Force men in northern Kashmir.

Seasoned observers say the Italian incident reeks of déjà vu as yet again foreigners facing criminal charges in India have escaped with impunity while Delhi has looked on helplessly.

Denmark's Kim Davy is wanted in India for a West Bengal arms case dating back to December 1995. Davy allegedly airdropped hundreds of AK- 47 rifles and other ammunition over Purulia, West Bengal. He escaped from Mumbai airport where his plane was forced to land. In 2010, the government said it would try to get him extradited but Denmark refused to send him back.

But perhaps the most sensational escape of an accused from India was that of Warren Anderson, ex- chairman and CEO of Union Carbide, who was charged with manslaughter by India for 1984 Bhopal gas disaster which took place in a Union Carbide plant in central Madhya Pradesh with deadly methane gas killing thousands of innocent people. Anderson was held but soon granted bail. He flew back to the US and never returned. Nearly 30 years after the Bhopal gas tragedy, the federal government has declined to disclose information on its extradition requests to US for Anderson on the pretext that it will "impede" investigation.

Italy's rebuff has once again raised doubts about India's diplomatic clout. With little wiggle room for diplomatic maneuver in the marines' case, Delhi now has no option but to press Italy in unequivocal terms to send back the marines. And yet again India finds itself caught helplessly reacting to another country's provocation without retaining any leverage for a fitting riposte.