In its second major proconservationist decision this week, the International Whale Commission voted today to make the Indian Ocean the world's largest whale sanctuary.

It banned all whale hunting for at least the next 10 years in the Indian Ocean, the Arabian and Red Seas, and the Gulf of Oman.The Indian Ocean is the home and spawning grounds of several species of great whales, including sperm whales, the species most recently endangered by heavy hunting.

The sanctuary was proposed by the Indian Ocean island nation of the Seychelles, a former British colony, which is developing whale watching as a tourist industry. Earlier in its annual meeting here, the Whaling Commission banned the hunting by factory ship fleets of all but Minke whales, which is greatly reduce the killing of sperm whales elsewhere on the high seas.

A proposal also to ban the hunting of sperm whales by land-based whaling boats failed today to win the necessary three-fourths majority of the member nations. Sperm whales are hunted by lamd-based whalers off the coast of Japan, Iceland, Spain and South America.

Although they failed to win a world-wide moratorium on all commercial whaling - either immediately or in phases over the next several years - delegations opposed to commercial whaling and the conservationists who were lobbying them here were jubilant about what Thomas Garrett of the U.S. delegations called a "stupendous week for saving whales."

The ban on hunting by factory ships of all but the smaller and more numerous Minke whales marked "the begining of the end of whaling," according to Richard A. Frank, the U.S. whale commissioner. "This provides a way to end whaling in an orderly fashion that Japan can accept."

Japan was given an exemption to continue hunting Minke whales with its factory ship fleet, including in a narrow band of water on the coast of Antarctica just south of the new Indian Ocean sanctuary. Nevertheless, Japan and the Soviet Union, which have the largest remaining whaling industries, opposed these and other conservation measures introduced here.

The Soviet Union may lose its entire whaling industry, which is already declining, because it was based on factory ship fleet hunting on sperm whales.

Sperm whales are hunted for their oil rather than their meat. The oil has been used to soften leather in the tanning industry and for lubrication, including the lubrication of rocket motors in the Soviet aerospace industry.

In recent years, synthetic alternatives have been developed for whale oil that are increasing being used in the leather industry. The Common Market countries, the largest remaining importers of sperm whale oil for leather softening, have been asked by Britain to stop importing it in the future. The British government also said this week it was prepared to stop importing whale oil on its own if the Common Market does not act.

Minke and a variety of other small whales hunted on a smaller scale, many of them by aboriginal whalers like Alaska's Eskimos, are killed for both their meat and their oil, which is used like vegetable oil. Japan is the world's largest producer, importer and consumer of whale meat, which is sold by Japanese grocers for about $3 a pound.An entire whale can be worth from $15,000 to $30,000 according to experts.

But with whales much harder to find in large numbers and the world market for whale meat and oil outside Japan steadily contracting, the factory ship whaling fleets have become increasingly uneconomical. Japan's whaling industry, with just one remaining factory ship fleet, needs government subsidies to survive.

"It is a bankrupt industry that is about to be foreclosed," said conservationist Craig Van Nolte, who is lobbying here on behalf of several animal protection and environmentalist groups. "It has been uneconomic for years and should have been gone out of business long ago. Its hanging on has been a tragedy for the whales."

But the industry is entrenched in Japan, where whale meat is a preferred delicacy. Jobs depend on the industry's survival, and whaling is a respected skill. While its own whale-catching has been on the decline, Japan has been importing whale meat in growing quantities from so-called "pirate whalers."

These whaling ships, which sail under various flags of convenience by international crews supervised by Japanese whale industry inspectors, are blamed by conservationists for violating whaling commission quotas and regulations by killing all the whales they find.

Conservationists have mounted a world-wide campaign against the pirate whalers in newspaper and magazine adverisements and articles, television documentaries, congressional hearings and U.S. diplomatic pressure of the Japanese goverment. Japan announced this month that it would stop buying whale products from countries not belonging to the commission after its current contracts expire.

Countries found undermining international conservation measures such as those of the Whaling Commission would be banned from fishing in U.S. waters and denied U.S. import licenses under legislation nearing final passage in Congress this summer.

Each year, Japan catches more than a billion tons of fish in U.S. waters and exports more than $250 million worth of fish to the United States. The Soviet Union, South Korea and Spain, among whaling nations, also fish extensively inside U.S. waters.

Many countries from the United States to Australia have stopped whaling and banned the import of whale products. Others, such as Brazil, Chile and Peru, plan to get out of whaling within a few years. CAPTION: Picture, A rubber whale is towed under the Tower Bridge in London as part of a protest. UPI