No evidence race behind Indian attacks: Australia

Australia's government said on Tuesday there was no evidence of a racial motive behind a series of attacks on Indian students, including the killing of an Indian graduate that threatens a diplomatic rift with New Delhi.

Accounting graduate Nitin Garg, 21, originally from Punjab, was stabbed to death on Saturday night on his way to a job at a fast food outlet in Melbourne.

"What we have to do is to let the investigations take their course, but certainly on the basis of what we're being told so far, by the Victorian authorities, there's no basis for a racial motivation behind this," Acting foreign minister Simon Crean told Australian radio on Tuesday.

The latest incident follows a series of attacks on Indian students in Melbourne and Sydney in 2009.

Indian media have labelled attacks against Indian students in Australia as racist, but police and the government have said the attacks are purely criminal.

Indian external affairs minister SM Krishna issued a statement condemning the "brutal attack", with Indian media reporting him warning the attacks were creating "deep anger" in India and could have a "bearing on bilateral ties".

Krishna hinted at possible sanctions targeting Australia's lucrative foreign student market, but said he hoped that would not be necessary.

Around 4,000 Indian students have already cancelled plans to study in Australia and Crean said he did not expect travel warnings or sanctions, appealing for "cooler heads to prevail".

Australian and Indian diplomats discussed the murder and Australia's security response in Canberra on Tuesday, Crean said.

The international student sector is Australia's third largest export earner, behind coal and iron ore, worth A$13 billion ($11.86 billion) in 2007-08.

Police in Victoria state, where Garg was killed, appealed for help on Tuesday after a public candlelight vigil overnight, while authorities searched for new evidence pointing to his killer.

In neighbouring New South Wales state, police also confirmed that a partially burned body found by a road last week belonged to another Indian national.

Deputy prime minister Julia Gillard said there should be no rush to judgement over the spate of attacks and defended Australia's crime rate as one of the world's lowest.

"We all know, tragically, in the world that we live in, whether you're in Melbourne, or whether you're in New Delhi, you can come to grief through violent incidents," Gillard told reporters.

"We've seen the death of a young man in Melbourne. That act is to be condemned by every Australian," she said.

A recent study forecast a 20% drop in Indian students in 2010, costing A$78 million, due to the attacks.

The study by The Tourism Forecasting Committee forecast 4,000 fewer Indian students, a fall of 21% compared with a 35% rise in 2009. Indian student numbers in Australia had risen at an average annual rate of around 41% since 2002.