legal – Is there really no way for Australian citizens to return home from India right now legally?

They can spend 14 days in another country and then return, but that becomes increasingly difficult with travel restrictions.

Australian citizens are simply not allowed to return home, even if they found a way?

That’s why the laws threatens with fines and jail terms. They will not be sent back if they somehow reach Australian soil.

Is there absolutely no way to do it? Can’t the embassy in New Delhi assist in some way? I assumed the government would arrange some kind of quarantine with rigorous testing in approved and monitored facilities before and after a chartered government flight to get citizens home or something.

I am not sure if you are asking if there is no way for the government to do it or the affected citizens and residents. For the government, it is sovereign and can decide to provide such facility or not, subject to possible consequences on its international reputations or internal approval. Why they choose one way or another is not a question suitable on Travel.SE.

For the affected citizens and residents, once the proposed measures take effect, it is not legally possible for them to return.

Additionally, even if the international law requires to different degrees that citizens have a right of return, it is not really enforceable unless the country incorporates the right in domestic law (e.g. Canada, even then it’s subject to limitations, but at least the court would carefully examine the case), although in some cases other countries where the citizens of the country denying the right of return currently are may protest. Australia apparently does not have a direct incorporation of a right to return in its constitution, though legal challenges on other grounds can take time but it is not clear and will take some time.

Plus, it doesn’t prohibit countries making reentry very difficult or very expensive.