Mr Garg was working at a fast food restaurant
The governments of India and Australia have condemned the killing of an Indian student in the Australian city of Melbourne on Saturday night.
Indian Foreign Minister SM Krishna urged the Australian authorities to "speedily book" the people responsible for the killing of Nitin Garg.
Mr Garg was stabbed to death on his way to a fast food restaurant in Melbourne.
There have been a number of attacks on Indian students in Australia in the past year.
Australian police blamed the attacks on opportunistic criminals, but some Indian students see them as racist.
The attacks have caused outrage in India and prompted Australian PM Kevin Rudd to reassure the Indian government that Australia is not a racist country.
Melbourne police said that the motive for the latest attack on Mr Garg, 21, an accounting graduate from the northern Indian state of Punjab, was not known.
Mr Krishna said the attack was "highly condemnable".
He said the Australian government should realise such attacks were making public opinion in India "polarised".
He said Australian authorities should take note of the "deep anger" caused by such attacks, and their possible effect on bilateral ties.
Australian Deputy Prime Minister Julia Gillard has also condemned the attack.
"This is a nation that welcomes international students. We want to make them welcome, this is a welcoming and accepting country," Ms Gillard was quoted as saying by Reuters news agency.
Gautam Gupta, president of a group of Indian students in Australia, said there was "extreme shock and fear and anger" over the killing of Mr Garg.
Australia's Tourism Forecasting Committee (TFC) said Indian students were choosing to stay away because of a series of attacks in mid-2009.
The number of Indian students studying in Australia is projected to fall by about 20% in 2010, the TFC said.
The decline is expected to cost Australia almost $70m (£44m).
More than 70,000 Indians studied in Australia in 2009. Australia's higher education industry is its third biggest export earner after coal and iron ore.
An interim report on Australia's international education sector released last month found its global reputation and brand had been damaged by violent attacks and migration scams, "particularly in India".
Prime Minister Kevin Rudd visited India this year, together with his education and foreign ministers, to deliver assurances that Indian students were safe.
Last year's attacks attracted prominent media coverage in India.
An Indian minister cancelled a planned trip to Australia and one of the country's leading film stars, Amitabh Bachchan, turned down an honorary degree from Queensland University of Technology, saying he could not accept it under the circumstances.