A boat carrying about 200 suspected asylum seekers has capsized in Indonesian waters 120 nautical miles north of Australia's Christmas Island.
At least 75 people are feared to have drowned, authorities have said.
Australian police said a military aircraft saw 40 people standing on the upturned hull of the boat.
"We know from what we have been hearing from the aircraft there are not 200 life jackets on board," Western Australian Police Commissioner Karl O'Callaghan told local television.
An Australian customs spokesman said border protection had detected what was believed to be a people-smuggling boat in distress earlier today.
"Indonesian navy ships are on their way there now," Indonesia's National Search and Rescue Agency (Basarnas) spokesman Gagah Prakoso told Reuters.
The sinking occurred within Indonesia's search and rescue zone and Australian authorities were offering assistance, Australia's Maritime Safety Authority said.
Refugees seeking asylum in Australia often set sail from Indonesia heading for Christmas Island in dangerous and overcrowded boats.
As many as 200 died when an overcrowded boat sank off the coast of East Java in December last year.
50 asylum seekers travelling from Indonesia to Christmas Island died when a storm dashed their boat onto rocks in December 2010.
Australia's Indian Ocean territory of Christmas Island, south of Indonesia, is a popular destination for asylum seekers, who travel by often crowded boats from Indonesia, with the help of people smugglers.
So far this year, more than 50 boats carrying more than 4,000 asylum seekers have been detected by Australian authorities.
