The institute, a privately funded foreign policy think tank, said international reaction to recent assaults on Indian students in Melbourne and Sydney showed regional attitudes to race in Australia remained sensitive.
"Australia can’t afford to forget that ... people in several Asian countries believe that racial prejudice is still prevalent in Australian society," institute executive director Michael Wesley said.
International student numbers in Australia have boomed in recent years, with 40 percent of the 450,000 enrolments coming from China and India.
But Wesley said some unscrupulous operators were exploiting foreign students and damaging the reputation of the legitimate institutions that helped build up the sector.
"Students who return to their countries with negative expe