MELBOURNE: Indian students rallied in Melbourne on Sunday as Australia scrambled to contain outrage over a wave of attacks that has seen it labelled racist and strained diplomatic relations with New Delhi.

What began as a local policing issue in Australia's second largest city has spiralled into a crisis that prompted talks between Prime Minister Kevin Rudd and Indian counterpart Manmohan Singh on student safety last week.

Students and Indian officials are demanding action after more than 70 assaults on their peers in a year in Melbourne, including at least four in the past fortnight, attracting prominent coverage in newspapers here and in India.

Pictures from a hospital bed of a comatose Sravan Kumar Theerthala, who was stabbed with a screwdriver by gatecrashers at a party, were splashed across front pages in India. A teenager faces charges of attempted murder.

"They were saying, 'Don't touch us you Indians' and 'Indians go home' before they got the screwdriver," said Theerthala's friend, Jayasanka Bagpelli.

Another student, Baljinder Singh, told last week how his attackers laughed as he pleaded with them during a robbery at a Melbourne train station.

"I was saying to them, 'I'm giving you all my money, don't kill me, don't kill me'," said Singh, who was stabbed and left with a six-inch (15-centimetre) wound to his stomach and has advised Indians to stay away from Australia.

Indian media have dubbed the attacks "curry bashings", a term reportedly used by youths behind the violence in Melbourne's western suburbs, where 30 percent of assault victims are Indian.

It is a grossly disproportionate figure in a city of almost four million with an Indian student population of less than 50,000.

Police deny any racial element to the attacks, arguing Indian students were often simply in the wrong place at the wrong time as they travelled home late with items such as mobile phones and MP3 players.

But Indian High Commissioner to Australia Sujatha Singh said racism was playing a part, even if some of the crimes were "opportunistic".

Federation of Indian Students president Amit Menghani, who led the rally of more than 1,000 supporters through central Melbourne Sunday, said the police attitude had frustrated students.

Bagpelli, who attended the rally, added: "It's only because the Indian government is now applying pressure that they are doing anything."

While the attacks are unlikely to result in any permanent damage at a diplomatic level, Canberra is concerned parents in India may prevent their children studying in Australia.

That would threaten the international education sector here, a 15.5 billion dollar (12.2 billion US) a year industry that has attracted more than 90,000 Indians nationwide.

More broadly, with headlines such as "Australia, land of racism" running in overseas media, there are also fears Australia's reputation for tolerance is sustaining long-term damage.

"We need to help make sure that the mothers and fathers of all students who come here are assured that Australia is a safe location to come to, that our general crime rates and violence rates are very low," Foreign Minister Stephen Smith told commercial television Sunday.

There are already signs the controversy is souring popular attitudes in India towards Australia, with Bollywood legend Amitabh Bachchan threatening to snub the offer of an honorary doctorate from an Australian university.

"My conscience is profoundly unsettled at the moment," Bachchan said on his blog, in which he also reported an "overwhelming" response from the Indian public over the issue.

Theerthala's assault proved the catalyst for widespread anger in India, sparking a flurry of high-level diplomatic activity and strong public statements from Indian officials indicating they had run out of patience.

"Such attacks cannot be allowed to happen," High Commissioner Singh said.