Indians first came to Melbourne as labourers, traders and hawkers. As Victorian census statistics show, there were very few Indian-born migrants in Melbourne prior to Federation. In 1891 around 1700 Indian-born people lived in Victoria, and by 1901 this number had changed little. Unlike the Chinese, Indians resided in Melbourne relatively unaffected by the racist policies of the early 20th century. In 1896 a firm of Hyderabad merchants had established a branch in Melbourne and by 1925 Indians had won the right to become naturalised Australians and to vote.
Between 1901 and 1966 the White Australia Policy greatly affected the number of Indians migrating to Australia. With the relaxation of immigration laws in the early 1960s, increasing numbers of Indians began to migrate to Victoria. By 1976 there were an estimated 6000 Indians in the State. Net migration peaked in the early 1970s, declined during the following 10 years and began to rise again in 1985. Well over half of this migration has been in the 'skilled' category. By 2001 there were 30 744 India-born people living in Victoria, with 96% of these residing in metropolitan Melbourne, making them the eighth largest ethnic group in the city. In the late 1990s the more established Indian community expanded to include large numbers of newly arrived Indian students attending Victorian higher education institutions. Their arrival was due partly to a booming Indian middle class and partly to solicitations by Victorian universities for full-fee paying, English-speaking students.
The highest concentration of Indians can be found in the south-eastern and north-western suburbs and in these areas there are numerous restaurants, grocery stores, temples and clothing shops catering to Indian clientele. The large numbers of Indian students have also given rise to a number of Indian restaurants and dhabas (roadside cafés) in Central Melbourne. Second-generation Indians' pride in their heritage has fuelled an interest in both classical and contemporary Indian dance and music in the wider community, with Bharatnatyam dance, Bhangra music and Bollywood films being staged in venues around Melbourne.
The heterogeneity of the Indian community in Melbourne is reflected in the variety of associations, shops, dance, restaurants and music. The Australia-India Society was started in Melbourne in the 1960s and as more Indians arrived, associations began to form around cultural groupings such as Tamil, Anglo-Indian, Maharashtrian, Goan, Gujarati and Bengali. In the late 1980s a Victorian Federation of Indian Associations was formed to co-ordinate the activities of these associations. Most have newsletters in their mother tongue and there are also two Melbourne-based English-language newspapers. Individual Indian communities celebrate region-specific cultural and religious festivals, but they come together to celebrate occasions like Diwali (the festival of lights) and Indian Independence Day.