THE number of Indians applying for visas to study in Australia has fallen by almost half, heightening fears for the nation's $17 billion international education industry.

The news come as India seethes over the recent murder of an Indian national, Nitin Garg, in Melbourne.

The Immigration Department figures, for the period from July to October 31 last year, show a 46 per cent drop in student visa applications from India compared with the same period in 2008.

The decline follows a year in which reports of attacks on Indians and unscrupulous practices by some colleges and migration agents have battered Australia's reputation as a study destination.

The figures also show overall offshore student visa applications have dropped by 26 per cent. Applications from Nepal plummeted 85 per cent, from 5696 to 845, and those from Korea, Brazil and the United States each fell by about 20 per cent.

However, applications from China increased slightly, by 0.2 per cent, and those from Vietnam rose 19 per cent.

The chief executive of Universities Australia, Glenn Withers, said the number of Indians applying to study at universities had dropped by about 20 per cent on the previous year.

He said a reduction in Indian students would be likely to have a greater impact on vocational colleges, where a greater proportion of Indians enrolled.

But Dr Withers said there were anecdotal reports that negative publicity had caused some middle-class Indian parents to turn to universities in countries such as Britain and Canada.

He said part of the problem was that Indians had started studying in Australia in large numbers only recently, so there were few alumni to counter bad press with stories of their own experiences.

Dr Withers said he was more concerned that interest from China may be softening, possibly because of warnings published by the Chinese Government about the quality of some colleges.

Andrew Smith, the chief executive of the Australian Council for Private Education and Training, which represents private colleges, said he was expecting a ''significant'' decline in enrolments this year from several countries, including India and China.

He said reputational damage, the strength of the dollar and a tightening of the visa application process had all contributed to the drop, which could threaten the viability of colleges and lead to job losses.

Research commissioned by the council predicted a 5 per cent drop in international enrolments could lead to 6000 job losses.