External Affairs Minister S M Krishna warned his Australian counterpart that failing to tackle attacks on Indians in Australia will "cast a shadow" over bilateral relations, an Indian government statement said.
New Delhi has launched diplomatic protests and travel warnings after a series of attacks on Indians since last year which the Indian media have labelled as racist, but which police and the government said were purely criminal.
Australia's Foreign Minister Stephen Smith telephoned the Foreign Minister SM Krishna condemning recent attacks, a statement said.
"(Krishna) recalled that Australian leaders had time and again, reassured India that the Australian authorities were treating the incidents of assaults with utmost seriousness. However, the incidents seem to be continuing," it said.
"He (Krishna) emphasized to the Australian Foreign Minister that non-redressal of this vital issue will cast a shadow on our otherwise excellent bilateral relations, and urged that the Australian government should immediately ensure that the concerned State police authorities deal with ongoing investigations with sensitivity and a sense of urgency."
The attacks have already damaged Australia's lucrative foreign student market, which is the country's third largest export earner, behind coal and iron ore, worth $13 billion Australian dollars ($11.93 billion) in 2007-08.
The number of Indian students wanting to study in Australia plummeted by 46 per cent between July and October last year, according to Australian immigration department figures.
South Asians account for 19 per cent of international students in Australia.