By Phil Mercer
BBC News, Sydney
There have been large rallies against the attacks in Australian cities
An Indian man who claimed he was attacked by four men and set on fire fabricated the story as part of an insurance scam, Australian police say.
Jaspreet Singh, 29, is accused of criminal damage and lying to police in Melbourne after accidentally setting himself on fire while torching his car.
Mr Singh has denied the allegations and will appear in court next month.
The incident took place amid tension between India and Australia over a series of attacks against Indians.
The attacks have taken place in Sydney and Melbourne.
Jaspreet Singh suffered burns to 15% of his body when his car was engulfed by flames in a suburb of Melbourne earlier this month.
He told police he had been ambushed by four men who deliberately set him on fire.
The alleged assault was quickly seized upon by sections of the media in India, who saw it as further evidence that racist attacks on young Indians in Australia were spiralling out of control.
Detectives have now alleged that Mr Singh's burns were accidentally self-inflicted as he set fire to his car in an attempt to defraud his insurance company.
Arson and medical experts have concluded that his injuries, as well as the damage to his vehicle and clothes, did not match his story.
Australian authorities have conceded that some of the assaults on Indian students in recent months were racially motivated, but believe the majority were the work of opportunistic criminals.
The attacks have caused outrage in India and strained relations between the two countries.
Prime Minister Kevin Rudd has since promised to ensure the safety of the 90,000 Indian students in Australia.