"The 48-year-old passenger was arrested after he attacked the cabbie last night," a police spokeswoman was quoted by news agency as saying.
According to police, after he was verbally abused by the passenger, the cabbie sought refuge at a Ballarat service station at about 2.15 am but the passenger followed him into the service station and allegedly assaulted him.
The Indian taxi driver did not receive any major injuries, spokeswoman said. The taxi was damaged in the incident.
The man was arrested at the scene and remains in police custody. He is expected to be interviewed by police later on Friday, Jan 15.