ustralian police launched a major murder investigation Friday after a three-year-old Indian boy's body was found dumped by a Melbourne roadside, threatening to cast a fresh shadow over ties.

Victoria state premier John Brumby said he found the killing of Gurshan Singh, who was visiting from Punjab, "personally distressing" but urged people not to presume any motive.

"What has occurred is an unthinkable tragedy. It's deeply, deeply distressing," Brumby told reporters.

"There are no visible signs of the cause of death at this stage... but I think it's very important that no one jumps to conclusions," he added.

Singh disappeared from a suburban house at about 1:00 pm (0200 GMT) on Thursday while his mother was taking a shower. His body was found about six hours later some 30 kilometres away, not far from the city's airport.

Detective Inspector Steve Clark said the parents were "particularly upset" and were seeing grief counsellors. The boy, whose mother was studying in Australia, had been in the country for about six weeks.

His death comes as Foreign Minister Stephen Smith seeks to smooth over relations with India, a major export market, after a series of alleged race attacks including the killing of an Indian student in Melbourne in January.