Recent demonstrations by thousands of Indian students in Melbourne and Sydney to protest violent attacks on them have threatened the future of one of the country's biggest earners – the education industry.
The attacks, which included physical assaults as well as a gasoline bomb, have roiled the Indian community here and in India. And they have raised questions about racial attitudes in a country that had a "white Australia policy" through much of the 20th century.
Australia's education industry has boomed in recent years to become the country's third-largest export earner behind coal and iron ore, generating about $12 billion in revenue in 2008.
Indian students – as well as Chinese – have played a big role in that growth. Their numbers rose 54 percent last year, and have doubled in the past three years. Second only to the ranks of Chinese students, Indians now account for more than 80,000 of the 415,000 foreigners studying here. More than half are based in the state of Victoria, according to a study by Access Economics, an analysis firm.
The police have said the first two cases were more a matter of opportunism and plain robbery. But victims say the motive was racist, pointing to racial epithets hurled at them.
Amit Menghani, president of FISA, the Federation of Indian Students in Australia, says that the severity of the attacks brought needed attention to a hidden problem.
"[Such abuse has] increased in the last four or five years," he says. "It was only because [one of these cases] was got hold of by the Indian media that all this has now gained such a high profile."
With its stated national goals of multiculturalism, as well as its easygoing lifestyle, Australia now attracts thousands of people from the Asia Pacific region.
But racial tensions have flared periodically. Four years ago, riots erupted when mobs of white youths rampaged through Sydney's beach suburb of Cronulla, beating up young men of Middle Eastern appearance.
And David Penberthy, a former editor of the Sydney Daily Telegraph, wrote in a column that "addressing Australia's casual racism would require a total change in our national psyche."
But some Indians who have lived in Australia without incident believe that foreign Indian students often lack a general awareness of their surroundings and may contribute to tensions.
Glenn Withers, the chief executive of Universities Australia, which includes 38 universities, says that many of the problems were occurring for students studying at smaller institutions.
"About 30 percent of foreign students attend main universities.... At [those, like Monash or Melbourne University], we have 24-hour security, we have buses take students back and forth from late-night library studying ... plus we have guards everywhere," he says. "But the smaller places don't."
According to Mr. Withers, who says the latest incidents have sparked reports of a dropoff in inquiries from India, about 25 percent of university enrollments are foreign students, while 10 to 15 percent of vocational students also come from overseas.
"The real problem is the fly-by-night agents sending students to cheap institutions," he says, "where they are not explaining that to the parents or the children and are only there to make a quick buck."