Chinese and Indian students have not been deterred by negative media coverage or reports of racist attacks, and are flocking to Australian universities in record numbers.

New statistics show amost 190,000 foreigners applied to study in Australia between July and December, an increase of 14.1 per cent on the same period in 2016, with Indian applicants surging by 32 per cent and Chinese applicants by 13 per cent. Nepal overtook Brazil as the third-largest source of applicants, rising by 46 per cent to nearly 12,000 prospective students.

Education has become the country's third-biggest export market. Credit:James Brickwood

More than 90 per cent of applicants were granted student visas, with 41,000 - a quarter of all student visas issued in the quarter - going to Chinese nationals. A further 20,000 were Indian nationals. The grant rate for Chinese applicants steadily declined over the course of 2017 from 98.3 per cent to 93.8 per cent.

In total, the number of student visas granted rose by 7 per cent.