The soldiers say they fired on the two fishermen after mistaking them for pirates while guarding an Italian oil tanker off the southern Indian state of Kerala in 2012.
They had been living in the Italian embassy in the Indian capital while they waited to be tried, and were not supposed to leave the country.
But the Indian Supreme Court gave marine Massimiliano Latorre leave to spend four months at home after he suffered a cerebral ischaemia - a restricted blood supply that can lead to a stroke - in September.
On Tuesday it rejected Latorre's request to extend his leave to undergo further treatment in January, and refused to allow his co-accused Salvatore Girone to return home to see his family for Christmas.
But Italy's Foreign Minister Paolo Gentiloni hit back strongly at the court's decision.
"Faced with such an attitude by the Indian authorities, the government reserves the right to take all necessary measures, starting with the recall of the Italian ambassador from New Delhi, although that would not mean breaking off diplomatic relations," he told a parliamentary committee.
Defence Minister Roberta Pinotti said Latorre's health "is the government's priority and nothing will be done to put it in danger", hinting that Rome could break its promise to return him to India.
A statement from the office of Italian President Giorgio Napolitano and cited by Ansa, said the president was “greatly displeased by the news coming from New Delhi about the latest negative developments in the case of the marines” and would “remain in close contact with the government and will closely follow guidelines to be determined in the Parliament”.
The marines were granted a home visit to vote in national elections last year, but India was furious when the Italian government initially said it would not send the men back.
A subsequent U-turn, which followed intense Indian diplomatic pressure, triggered the resignation of Italy's then foreign minister.
Italy has been contesting India's right to try the men in the courts since March.
It maintains that the pair should be tried on home soil since the shootings involved an Italian-flagged vessel in what Rome says were international waters.
But India insists the shooting took place in its waters.