MELBOURNE: Australia on Monday "unreservedly" condemned the murder of an Indian national as New Delhi angrily slammed the attack and warned it could hurt bilateral ties.
Deputy Prime Minister Julia Gillard stressed that Australia welcomed foreign students after accounting graduate Nitin Garg, 21, was stabbed by unknown attackers Saturday night before collapsing in the Melbourne burger restaurant where he worked.
Indian students have been hit by hundreds of alleged race attacks, prompting street protests last year and damaging Australia's lucrative international education industry.
"I obviously unreservedly condemn this attack," Gillard said. "People in Melbourne's west, people around the nation, I think they will be joining together to say we unreservedly condemn this violence."
She was speaking after India decried the murder as a "crime on humanity" and said it would "certainly" affect ties between the two countries.
"This heinous crime on humanity, this is an uncivilised brutal attack on innocent Indians," Indian Foreign Minister S.M. Krishna told reporters.
"It certainly will have some bearing on the bilateral ties between our two countries," he added.
Police have said there is no evidence the murder was racially motivated, but also told AFP that 1,447 people of Indian descent were crime victims in Victoria state in the 12 months to July 2008.
Gautam Gupta, president of the Federation of Indian Students of Australia, said many more attacks went unreported and questioned why police were playing down race as a factor.
"If they have not caught the criminal, how can they eliminate racism as being behind this attack," Gupta told AFP. "What were they expecting to find on the scene? A business card saying: 'I am a racist'?"
According to his housemate Parminder Singh, Garg, understood to be from Punjab in northern India, had been targeted by drunken louts at a train station in an earlier incident.
"They were just drunk and they wanted to find anyone to beat," Singh said.
"If they find someone alone they just beat (them) because they know nothing is going to happen after that. What will happen? Police will not do anything."
Prime Minister Kevin Rudd, Gillard and Victoria Premier John Brumby have all visited India recently to ease frictions and promote the 15.4 billion US dollar foreign education export industry, Australia's fourth largest export earner.
Australia has forecast a 20 percent drop in students from India next year after earlier attacks prompted a barrage of negative publicity in the country.
Each allegedly racial attack sparks outrage on India's passionate TV news channels, amid rising concern from families and friends of students studying in the country that was previously seen as a safe and even glamorous destination.
Following Garg's death, India's Mail Today tabloid splashed the headline "Racist Aussie gang knifes Indian to death" across its front page as it slammed Australian police for failing to protect Indian students from "hate gangs".
But deputy police commissioner Kieran Walshe said Victoria had a large Indian population and he did not believe the community was being singled out.
"I don't believe that there has been any really detailed rascist motives around assaults on Indian people in the past," he told reporters.
"In some cases there may well be. But in the general sense of it, a lot it we've seen has been around opportunistic theft."
Australia attracted some 117,000 Indian students in the year to October, about 19 percent of foreign enrolments as universities and colleges actively target the country's growing middle class.
Australia's education sector has also been tarnished by a series of visa scams involving agents who exploit foreign students.