A war of words has erupted between the Victorian government and the opposition over the state's handling of the Indian crisis.

Days after the government recruited cricket legend Shane Warne to help smooth relations with India, it has been accused of failing to address the spate of attacks against Indian students.

In a speech to Australian and Indian business leaders on Monday, Opposition Leader Ted Baillieu said the government was in denial over the serious and increasing problem of racist attacks on Indian nationals studying in Victoria.

Premier John Brumby did not front the media to reject the allegations.

Instead Education Minister Bronwyn Pike launched a blistering retort, accusing the opposition of branding Victorians racists and inflaming the issue.

"Ted Baillieu has called Victorians racist," she said.

"He knows it was an irresponsible thing to do and he knows that it's not a constructive approach to blame, to shame, to say unkind things about people.

"To label the whole community as racist is incredibly destructive, it's very irresponsible and it doesn't take us anywhere."

Ms Pike described most Victorians as tolerant and accepting.

The opposition leader's comments were divisive and would do "untold damage" to Australia's reputation overseas, she said.

Mr Baillieu hit back saying he did not believe Victorians were racist but there was a minority who exhibited racist behaviour.

"John Brumby and his ministers are in denial about that racist behaviour, and their reaction today shows they are all about attacking me and not attacking the issue," he said.

Earlier, Mr Baillieu told ABC Radio that assaults in Victoria had risen by 70 per cent in the past decade and this was being felt in the Indian community.

"We've got a problem with violence and crime and assault - record levels of violence in this state," he said.

"The premier's been in denial about it. That's spilling over into racist behaviour and racist attacks as well, and it's having an impact."

Ms Pike said the government had responded to the Indian crisis by boosting police powers and strengthening the courts to better deal with offenders motivated by hate.