How bad is Australia’s relationship with India? How damaging to Australia’s global reputation is the controversy over attacks on Indians in Melbourne? Is this a beat-up by the over-zealous Indian media, or is it a genuine foreign policy dilemma?

If you believe The Australian‘s foreign editor, Greg Sheridan — not always the calmest commentator on the foreign beat — Australia is “enduring a catastrophe in its foreign policy and its standing in the world generally”. He sheets the blame for this situation to one man — Victorian Premier John Brumby:

Perhaps no premier since World War II has done more to damage the Australian national interest … Brumby’s reaction of indolent denial, and the incompetent lack of response from his government and police force, have contributed hugely to a vast anti-Australian backlash in India. But this is happening throughout Asia and more broadly internationally. The BBC, CNN, Al-Jazeera — all are covering the attacks in a way that would constitute hundreds of billions of dollars worth of negative publicity for Australia.

There is now a raging, anti-Australian fury in India that cuts across any party or political or even communal divides. Australia has never been so hated in India and in much of Asia … It is now moving into the stage where it will do serious damage to the bilateral relationship and to business. In the last couple of weeks two Australian companies which had expected to sign contracts in India were told their commercial partners no longer wanted to deal with Australian companies.

Sheridan’s commentary may be colourful, but its underlying message is hard to dispute. There is, at the minimum, a perception issue. The perception that some Australians are racist and that Australia’s political leaders are full of hot air but little action when it comes to addressing the problem confronting Indians on the streets of Melbourne.

If this situation was reversed — if Australians were being attacked on the streets of India — there’s no doubt that sections of our media would be hysterical in taking the egg-beater to the story and demanding action from Indian authorities.

Which, when you think about it that way, is why Brumby and Rudd, at the start of an election year for each, have a nasty problem that could get a lot worse.