India has issued a travel warning for its citizens in Australia after two students were murdered in attacks believed to have been racially motivated.

Students in the country were advised to take “basic” precautions against possible attacks after Nitin Garg, 21, an accountancy graduate from Punjab, was stabbed to death in Melbourne at the weekend.

Police in the Victorian state capital said another Indian man was attacked in the same suburb on the same night, while police in New South Wales Police confirmed that a partially burned body found last week was that of another Indian national.

“The government advises Indian students studying in Australia as well as those planning to study there, that they should take certain basic precautions in being alert to their own security while moving around,” the Indian advisory said.

“The number of such incidents of assault as well as of robbery has been on the rise in recent months, which has affected not only Indian students but also members of the larger Indian community in Australia,” it said.

Australian police have maintained there was no evidence that Mr Garg’s murder was racially motivated, despite their own figures showing that 1,447 people of Indian descent were victims of a crime in Victoria in the 12 months to July 2008.

But the police investigation has done little to placate the Indian government, which described the attack on Mr Garg as a “heinous act against humanity.”

Denouncing the murder as “an uncivilised brutal attack on innocent Indians,” SM Krishna, the external affairs minister, said it would threaten bilateral ties between the two countries.

India’s unbridled anger has forced Australian ministers into the embarrassing position of having to insist that Indians were not being targeted simply because of the colour of their skin.

Julia Gillard, the deputy prime minister, insisted Australia was a safe country for all international students.

“In big cities around the world we do see acts of violence from time to time. That happens in Melbourne, it happens in Mumbai, it happens in New York, it happens in London,” she said.

“Any individual act of violence is obviously to be deeply regretted and our sympathies go to anyone who is harmed by an act of violence.”

Simon Crean, the trade minister, urged India’s leaders to avoid fuelling hysteria. But it may be too late.

The murder already threatens to unravel Canberra’s efforts to protect India’s £1.5 billion contribution to the country’s international education industry.

Australia’s Tourism Forecasting Committee has forecast the number of Indians studying in Australia will fall by about 20 per cent in 2010 as a result of the violence.

The spate of attacks against Indian students in Australia began in the middle of last year with attacks in Sydney and Melbourne. In one incident, a student was critically injured by a screwdriver.

In response, thousands of Indians took to the streets of the cities in protest, prompting Kevin Rudd, the prime minister, Miss Gillard and John Brumby, the Victorian premier, to visit India in an attempt to mend ties and improve Australia’s image abroad.

The attacks are believed to have become more frequent as the boom in students from the sub-continent forced them into less affluent suburbs where they compete for part-time jobs and housing with low-skilled youths from other migrant backgrounds.