A man of Indian descent was recovering in hospital yesterday after a group of men set him on fire in the Australian city of Melbourne, police said, the latest in a string of similar attacks.

Police stressed there was no evidence of a racial motive after four men poured an unidentified fluid on the 29-year-old and set him alight in a suburb of the city, leaving him with 15 per cent burns.

It follows the stabbing murder of another Indian in the city last weekend, which prompted a Delhi newspaper to run a cartoon likening Australian police to the Ku Klux Klan, and in turn an angry reaction by Australian officials.

In the latest incident, the victim was parking his car in a side street after dinner with friends when he was attacked in the early hours of yesterday. His condition was described as stable.

"I believe there's no reason at this stage to consider this in any way racially motivated," detective sergeant Neil Smyth told reporters.

"The circumstances of parking a car randomly on a side street and just some people approaching him are a bit strange and it's highly unlikely, therefore, to be a targeted attack on any individual."

Police have only a vague description of the attackers "which is really just unspecific, just four males", Smyth said. "It is an unusual event."

Deputy Prime Minister Julia Gillard said the government "condemns all acts of violence in the strongest possible way... This matter remains under investigation by the Victorian police." In New Delhi, the government said it was in touch with Australian authorities but urged the media to report on the incident responsibly.

"The Indian high commissioner in Canberra and consul general in Melbourne are following up this matter vigorously with the Australian authorities," foreign ministry spokesman Vishnu Prakash said. "Under the circumstances, the media is advised to exercise utmost restraint in reporting on these sensitive issues."

But India's Overseas Affairs Minister Vayalar Ravi, who is responsible for Indians working or studying abroad, reacted sharply and rebuked Australia for failing to prevent such attacks.

"I want to make it loudly clear that the (Australian) government should take preventive action," he said on the sidelines of a conference in Delhi.

The murder on January 2 of Nitin Garg brought sharp condemnation from the Indian government and allegations of Australian racism in the Indian media.