His killing is the latest in a series of attacks on Indian students in the country.

Media in India have labelled the series of attacks against Indian students in Australia as racist, but police and the Australian government have said the attacks are criminal, not racist.

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

He also said that Australian and Indian diplomats discussed the murder and Australia's security response in the capital Canberra on Tuesday.

Police in the state of Victoria, where Garg was killed, appealed for help to find the assailant.

Burned body found

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

Julia Gillard, the deputy prime miister, said there should be no rush to judgement over the 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," she told reporters.

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

Australia's international student sector is the country's third largest export earner, behind coal and iron ore, totalling $11.7bn in 2008.

Attacks against Indian students in 2009, mainly in Melbourne, led to protests by students and strained bilateral ties, prompting Gillard and other Australian ministers to visit India to offer assurances that everything was being done to stop the attacks.

Australian universities also sought to reassure students and their families that Australia was a safe place to study.

But a recent study forecast a 20 per cent drop in Indian students in 2010 due to the attacks.