A 7.5-magnitude earthquake struck near Nicobar Islands off India's eastern coast, but no casualties or damage were reported.

The earthquake occurred 155 kilometres west of the Nicobar Islands in the Bay of Bengal at 1:26 am local time (0756 GMT Saturday), the US Geological Survey said in a statement.

A tsunami watch was subsequently cancelled for India, the Pacific Tsunami Warning Centre said, as sea level readings indicated that a significant tsunami was not generated.

No casualties were reported in the Andaman and Nicobar Islands although there was a power-blackout in the capital Port Blair.

"We made contact with 10 inhabited islands in the Nicobar district and there is no damage to property or loss to life. The tsunami notice was also withdrawn later," T Sreekanth, senior administrative official at the Nicobar Islands told the NDTV network.

Most of Sri Lanka's western and southern coastal areas felt the tremors, which lasted less than two minutes, according to the head of the country's Geology and Mines Bureau, D Wijayananda.

The quake were also felt in the coastal areas on the Indian mainland nearly 1, 200 kilometres west of the island territories.

The tremors caused panic in India's southern and eastern cities of Chennai and Bhubaneshwar where people rushed out of their homes and did not return for a couple of hours out of fear of aftershocks.

On December 26, 2004, a 9.2-magnitude earthquake off the coast of Sumatra triggered a tsunami that swept across the Indian Ocean as far as Madagascar, killing an estimated 230, 000 people in 14 countries.

At least 14, 000 people died across India's eastern coast and the Andaman and Nicobar islands.