The number of Indians granted student visas in Australia during the last financial year has fallen to 29,721, less than half of the number in 2008-09.
Overall, the number of international student visas dropped more than 16 per cent. The results follow a year of turmoil in the education sector, with legislative changes, the global financial crisis and student security issues putting pressure on student numbers, The Age newspaper reported on Thursday.
In 2008-09, 65,503 Indian passport holders were granted Australian student visas across all education sectors. But in 2009-10, the number fell to just 29,721.
Overall, 50,540 fewer international students were granted visas to study in Australia in 2009-10 compared with 2008-09.
A spokeswoman for Immigration Minister Chris Evans said despite the fall, Australia was still receiving large numbers of applications for student visas, but that "the government understands it is a difficult environment for the international education sector at the moment".
She said the government had made changes to "protect the quality of education Australia offers and ensure the skilled migration programme is more responsive to the nation's skills needs".
"Education is a major export market for Australia and there must be a focus on the quality of the export, not just numbers of students enrolling in courses," the spokeswoman said.
Stephen Connelly, president of the International Education Association of Australia, said the drop was not surprising but very worrying.
"There is so much goodwill we generate from having international students in our country, and we are absolutely shooting ourselves in the foot at the moment," he said.
Connelly said the government and opposition had sent negative messages to potential students during the federal election campaign and work had to begin on improving Australia's reputation.
If the problems were not tackled quickly, Connelly said, there would be a further significant drop in student numbers.
"Applications being received by agents would indicate that the numbers will go down even further. There's a lot more pain in store, I would say."
But he played down the significance of student security issues, which flared up in Victoria last year following a series of allegedly racist attacks on Indian students.
"(Student security) would be lower down on the list of reasons than the difficulties of getting a visa and the lack of differentiation among providers," Connelly said.
National Union of Students president Carla Drakeford said: "International student decline is dangerous for the university sector - not only because it creates a hole in university funding, but also because of the innate value international students bring to our community and higher education sector."
Drakeford said student security, accommodation and cost of living were all contributing factors in the drop, but she welcomed the government's recent legislative changes designed to weed out "dodgy" providers.
Matt McGowan, Victorian secretary of the National Tertiary Education Union, said the drop had "very real potential to undermine the financial viability of some of our universities and other education providers".
The acting chief executive of the Australian Council for Private Education and Training, Claire Field, agreed that the government needed to act quickly to reverse the decline.
"The current and projected downturn in international student numbers is placing our economy, our education industry, and Australian jobs at risk."