Here are 10 big developments in this story:
Italy's Foreign Ministry wrote to India last night to say the marines, Massimiliano Latorre and Salvatore Girone, will not return to face murder charges in India.
Prime Minister Manmohan Singh has said that Italy's refusal to send back the two marines is "unacceptable."
The main opposition party, the BJP, has accused the government of a diplomatic failure, and will demand an explanation in Parliament.
The marines were scheduled to return to India on March 23. They had been allowed by the Supreme Court to spend nearly two weeks at home for Christmas.
Italy says the marines were part of an anti-piracy military security team for a cargo ship and shot the fishermen because they thought they were pirates.
Italy says that it's open to international mediation, but trying the sailors in India violates their rights and the principle of immunity for foreign state actors.
In Kerala, the wife of one of the fishermen who was shot said: "This is nothing but a conspiracy at the highest level." The woman, who uses just her first name, Dora, said, "The Indian government should see that they bring back the two marines to stand trial in the case in our country."
Kerala Chief Minister Oommen Chandy said Italy's decision is unacceptable and said he will urge the Foreign Minister to escalate the issue.
The long fight over the marines' fate has strained ties between India and Italy, with Rome saying that they should be tried in an Italian court and that the shooting happened in international waters, which India disputes.
The Supreme Court ruled earlier this year that the men should be tried by a special court to be set up by the central government in consultation with the chief justice. The decision removed the case from the jurisdiction of Kerala.
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