An Indian man is in hospital after being set on fire in the street in Melbourne early this morning.

Jaspreet Singh, 29, was attacked in Essendon in Melbourne's north-west shortly before 2.00am (AEDT).

He had just come home from a dinner party with his wife and went to park his car when four men poured fluid over him and set him alight.

He is in a stable condition in the Alfred Hospital with burns to 20 per cent of his body.

Police say the man is of Indian origin but they do not know whether he is an Australian citizen.

Friends say the man is living in the city on a spouse visa.

Detective acting senior sergeant Neil Smyth says it is not yet known who the four men could be or their relationship to the victim.

He says investigations indicate the attack was random.

"It's unlikely to be a racially motivated incident as due to the timing and the nature, it's highly unlikely anyone could have targeted the victim in the circumstances," he said.

It has been a week since 21-year-old Indian man Nitin Garg was stabbed to death on his way to work in West Footscray.

The murder has sparked outrage in India and among Indians in Melbourne, who say racist attacks are on the rise.

Gautam Gupta from the Federation of Indian Students of Australia says the attacks are unacceptable and the Federal Government must act.

"We are extremely disturbed, we have contacted the Prime Minister's office and have suggested that they intervene, it's high time they intervene," he said.

"How many times are they going to just dodge this issue."

Cartoon 'hysteria'

Today the editor of an Indian newspaper said Australia was reacting hysterically to a cartoon depicting an Australian police officer as a member of the Ku Klux Klan .

The cartoon shows a person in a Ku Klux Klan hood wearing a police badge, with a caption that reads: "We are yet to ascertain the nature of the crime".

The editor of the Mail Today newspaper, Bharat Bhushan, has defended his decision to publish the controversial cartoon.

Mr Bhushan has also defended the paper's cartoonist, R Prasad, who drew the piece in response to attacks on young Indian men in Melbourne.

"What he does is he exaggerates things," Mr Bhushan said.

"He forces people to look at a particular point of view, which we had thought in a mature society like Australia would lead to introspection, rather it has led to hysteria."

Deputy Prime Minister Julia Gillard has expressed outrage at the cartoon's Ku Klux Klan reference.

"Any suggestion of that kind is deeply, deeply offensive to the police officers involved and I would absolutely condemn the making of a comment like that," Ms Gillard said.

"[The police] have indeed worked in close collaboration with representatives of the Indian community as they've gone about this step up in policing."