Why did Columbus refer to Native Americans as Indians?

When Columbus first got sponsored by the monarchs from Spain for this voyage, it was originaly to find a new efficient way to go to India. To trade with them without the influence of Muslim traders with there influence within that area. So Columbus thought that if he sailed across the Atlantic then he would reach India being able to trade with them.

When he arrived to the Americas in 1492, he thought that the indigenous peoples of the Americas were the Indians. When he arrived he thought he was in India.

Later on in history, Amerigo Vespucci, an Italian explorer, explores South America around 1499-1502 and realizes that this is a whole new continent that is unknown to Europe.