For nearly a decade, the popularity of Australian universities rose rapidly among Indian students, and the number of those heading to the country for higher education rose from about 10,000 in 2001 to more than 70,000 last year.
But that could change this year due to a string of negative publicity generated by attacks on Indian students in Australia.
A travel advisory by the Indian government earlier this week warned that Indian students in Australia face an increased risk of assault. It was issued after an Indian graduate was stabbed to death in Melbourne. His stabbing came on the heels of a spate of attacks on Indian students in Australia in recent months, which the Indian media have dubbed as racist.
It is a charge that Australian officials have strongly denied. They say the attacks are purely criminal, and the country is safe for foreign students.
Nevertheless, as concerns rose in India, foreign minister S.M. Krishna called on Indians to assess their options while exploring the possibility of studying in Australia.
"I would suggest that the Indian parents to be discreet and they better get informed," Krishna said.
Education consultants in India say they anticipate a sharp drop in the numbers of Indian students enrolling in Australian universities. They point out that besides the attacks on students, there also has been adverse publicity about unscrupulous migration agents and sub standard courses in some private colleges.
Inder Panjwani, general secretary of the Association of Australian Education Representatives in New Delhi says very few people are now turning up for information.
"As I can see there is a drop in inquiries because of a lot of fear psychosis. The confidence level cannot just be increased," Panjwani said.
Australian officials agree that the country's over two billion dollar education trade with India could be hit. But they say this could also be the result of the global recession, and the rising cost of living in Australia due to the strength of the Australian dollar.
Foreign universities have been actively targeting India's growing middle class, whose children head out to other countries due to intense competition for the limited high quality universities at home. Australia, the United States and Britain have emerged as the most popular destinations for these students who spend an estimated $13 billion every year on education in foreign countries.