The US Geological Survey said it occurred about 150km (95 miles) west of the Nicobar Islands and 440km from Sumatra, Indonesia.
The Pacific Tsunami Warning Center initially issued a warning for the entire Indian Ocean region.
The agency later downgraded the warning to India only, before cancelling the alert altogether.
"Sea level readings indicate that a significant tsunami was not generated," the Hawaii-based centre said.
No damage was reported in the Andaman and Nicobar islands, although a total blackout sparked panic in the capital, Port Blair, witnesses said.
More than 350,000 people live on nearly 600 islands in the remote archipelago.
In 2004, a powerful earthquake off Sumatra's coast triggered a tsunami that killed more than 220,000 people around the rim of the Indian Ocean.
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