Gillard made the announcement during Oz Fest at Purana Quila where Australian musicians Mark Atkins and Gurrumul Yunupingu and Ravishankar's daughter Anoushka Shankar mesmerised the audience with their performance against a breathtaking 3D projection.
"I announce Ravishankar World Music Scholarships in Victoria College under University of Melbourne. This scholarship signifies is that all we have to do is to learn and share from each other," she said inaugurating the Ozfest.
She also mentioned about C S L Nadia, an Australian actress who appeared in Indian movies in 1940s, in her speech.
The Oz Fest, dubbed as a night celebrating the meeting of Australia and India, began with a spectacular outdoor concert at Purana Qila's Sher Mandal Observatory.
A 3D light projection brought life to the observatory and created a backdrop for performances by iconic aboriginal Australian singer Gurrumul Yunupingu and sitarist Anoushka Shankar.
Australia's didgeridoo virtuoso Mark Atkins also performed at the venue.
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Gillard said the fest brings Australia to India in a "new and fresh way" and it will reflect the great work of arts.
Union HRD Minister Kapil Sibal said both the countries share same values and strive for a just world.