India’s supreme court has quashed all criminal proceedings against two Italian marines accused of shooting dead two fishermen from a tanker off Kerala in 2012.

The closure reportedly came after the Italian government paid INR 100m ($1.36m) compensation to the families of the two Indian nationals.

“The case with India is closed. A success of Italian diplomacy,” tweeted Paolo Gentiloni, the European Union's economy commissioner.

Massimiliano Latorre and Salvatore Girone were guarding Dolphin Tankers' 104,000-dwt Enrica Lexie (built 2008) when they fired shots at a fishing boat off the south-western coast of India.

The two marines reportedly mistook the fishermen for pirates, but Indian authorities charged them with murder.

An Indian court released the Italy-flagged tanker after a brief detention.

In 2014, Dolphin Tankers sold the Enrica Lexie to the Onassis Group for $34m. The vessel was renamed Olympic Sky and continues to trade.

India had held the two Italians for some years before allowing them to return to their home country.

Bilateral relations between India and Italy were strained and, in 2015, the two countries took the case to the Permanent Court of Arbitration in the Hague.

Last year, the international arbitration court ruled that India did not have jurisdiction over the marines based on the United Nations Convention on the Law of the Sea.

The court said the marines were entitled to immunity but that India was entitled to claim compensation for the loss of life and damage to the fishing boat, among other items related to the shooting incident.

New Delhi accepted the ruling and petitioned to the Supreme Court to end the case.