Italians Should Be Prosecuted Under Indian Law.
The fishing boat was flying an Indian flag, so it was a small piece of Indian territory in the exclusive economic zone(EEZ). The Italians attacked an Indian fishing boat in India's EEZ. The EEZ extends upto 200 nautical miles where India protects its wildlife and natural resources. If the Italian ship had killed a protected species or wildlife then action would be taken under Indian law. In what way are human beings inferior to animals or wildlife. If India has the right to defend its wildlife and natural resources, then India also has the right to defend its citizens.
More details need known on this, and your understanding of the EEZ is flawed. An exclusive economic zone is not the same as territorial waters.
The indian fishing boat was not fired at from the italian ship. The two incidents happened in two different places and at different times. Resumation of the two dead bodies is necessary for a further autopsy and check of bullets. So far this is denied, to protect the real culprits.