Communities competing to host the precinct dispute the fairness of the consultation process.
An excited Indian bride has been buying her wedding clothes in the Melbourne suburb of Dandenong.
Shop owner Sudesh Singh says she works with customers from around Australia.
"They come from Perth, Adelaide, Brisbane, Tasmania. And we get a lot of mainstream customers here. They go to Bollywood parties. There are a lot of weddings now,n targeted as Bollywood."
With an established strip of shops featuring goods from India, Pakistan, Sri Lanka, Bangladesh and Fiji, Dandenong is a likely home for the city's planned new Indian cultural precinct.
Branded "Little India" since 2010, Dandenong's campaigners think it is the obvious choice.
"You are in the Museum India. This was established last year and supported by the Victorian government and the Indian government in the middle of the Little India precinct in Dandenong."
The president of the Confederation of Indian Associations of Australia, Vasan Srinivasan, has spent years helping develop Little India.
The possibility the state government might select a location other than Dandenong shocks him.
"This has divided my community. Not only that. (For) half a million dollars, where can you create a precinct like this? Thirty-six shops, the first-ever Museum India in Little India."
Melbourne's Chinese, Vietnamese, Italian and Greek communities all have official precincts.
They are places to meet, hold festivals and do business.
They are also significant tourist attractions.
But a formally recognised Indian cultural precinct in Melbourne could be a first for Australia.
The suburb of Wyndham would love to take home the honours.
It recently hosted India Day celebrations and has a youthful Indian community that is growing fast.
But local campaigner Sudhir Juneja says he believes the consultation process initiated by the government has raised hopes that will ultimately be dashed.
"It's already being said in various circles that Dandenong has already got it. My point is, if Dandenong has already got it, then why are we doing all this exercise? Give a fair go to everyone who's involved."
Local councillor Gautam Gupta believes the advisory panel, handpicked by the Victorian government to shortlist three locations, is skewed in Dandenong's favour.
He says three of the eight panel members have links to Dandenong and none were drawn from the Wyndham area.
"We are being locked out of the process, essentially. And it is unacceptable. And that is what is upsetting the community in Wyndham. The intention is right. All we need is the delivery to be right."
State Minister for Multicultural Affairs Robin Scott says the panel is made up of people with experience.
"We had a fantastic process, with over 220 people attending public meetings. I think it's 67 written submissions. So, my view is that there should be fair participation where everyone gets an opportunity to have their say. And I'm going, as minister, be committed to a good process which gives a fair outcome to all the community."
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