Cricket Australia chief executive James Sutherland remains confident that India's tour will go ahead - despite the BCCI ordering the squad to remain in Sydney.
The BCCI are infuriated that Harbhajan Singh has been banned for three matches after been found guilty of racially abusing Andrew Symonds during the second Test in Sydney.
The Indian board are refusing to continue the tour pending Harbhajan's appeal - however Sutherland is confident the remaining two Tests will be played.
He said: "Cricket Australia and the Indian cricket board, the BCCI, are continuing to discuss issues arising during the recent Sydney Test between Australia and India.
"However, those discussions have not included any advice that the tour will not continue.
"There are a number of difficult and complex issues that have arisen out of the match and are the source of ongoing discussion.
"It's understandable in many respects that emotions are still running high after a match like that.
"I think that ... emotions have run high on various issues arising out of this match and I'm sure in the cold hard light of day the two captains can get together and discuss any residual differences that may be existing."
Australia captain Ricky Ponting, who reported Harhbajan Singh to the umpires during the second Test, believes that it would be "extreme" to cancel the tour.
He told Sky Sports News: "They are entitled to do whatever they think is appropriate at the time, but for me that would be a bit extreme, I must say.
"From what I and the rest of the Australian players can take from the first two Tests is a lot of fun and a lot of enjoyment.
"Sure there has been something else in the background in this last Test that has probably put a sour taste in a couple of the Indian players' mouths.
"But it is important to look past that and realize that India and Australia have had tremendous relations during 100 years of Test cricket."