The marines, who were on an Italian-flagged tanker to protect it from pirates, allegedly sank a fishing boat, killing two fishermen, after mistaking it for a pirate vessel off the southwestern state of Kerala.
The Indian government appears to be backing away from a promise the Italians would not face the death penalty if they are convicted, the Italian news agency ANSA reported.
Antonio Tajani, the vice president of the European Commission and commissioner for industry and entrepreneurship, said he has written EC President Jose Manuel Barroso suggesting the EU suspend free-trade talks with India and end favorable tariffs.
"The death penalty goes against all EU principles, Europe was awarded the Nobel Peace Prize partly for its opposition to the death penalty and so a choice such as this, against two marines engaged in anti-piracy operations, would be totally unacceptable," Tajani said on Italian radio.
India's National Investigative Agency has proposed trying the two marines under a 2002 anti-terrorism law that could allow the death penalty to be imposed, the Hindu reported last week.
Press Trust of India reports the interior minister is expected to make a decision next week.