"curry-bashing" is not a term I'm familiar with, but it must refer to racially motivated attacks against Indians. ) "backfires on" means that the Australians' "curry-bashing" activities are having unexpected negative consequences for the country. The article goes on to say that Australian universities are "alarmed at the dwindling Indian registrations"; these are presumably the negative consequences referred to.
New words, one handy idiom, and a 2-minute quiz — delivered to your inbox to keep your streak alive.