At least 23 people were feared dead after a boat carrying about 40 suspected asylum seekers sank on Monday, 350 nautical miles north west off of Australia in the Indian Ocean, even as massive rescue operations have been launched to search for possible survivors.

A giant LNG carrier is already at the scene and so far 17 people have been rescued from Indian Ocean, but it is feared there were at least 40 suspected asylum seekers on board.

"All the efforts right now are legitimately dedicated to attending to lives at risk at sea," Prime Minister Kevin Rudd told reporters.

Earlier, AMSA spokeswoman Rhianne Robson said the crew was still searching for survivors, but they held grave concerns. "The LNG Pioneer is a large vessel and they are trying their best with life rafts and their life boat to recover those in the water," she was quoted as saying by ABC.

Australian Customs and Border Protection appears to have taken control of the rescue effort. The boat sent out a distress signal late last night and since then Australian Maritime Safety Authority (AMSA) has been marshalling resources at sea and in the air to find the survivors.

Medical director of RFDS in Western Australia, Stephen Langford, said time is critical. "It's a fairly urgent task because there's still people in the water and the weather is not fantastic," he said.