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Indians accounted for 58 per cent of the total skilled work visas granted last year — 53,863 of a total of 93,566.
Americans were the second largest community with 9,255 visas.
"The information technology sector sponsored 42 per cent of skilled work visa applications, followed by professional, scientific and technical activities (18 per cent) and financial and insurance activities (12 per cent)," the Office of National Statistics (ONS) said.
The figure for Indian students coming to study in the UK stood at 11,642, marginally up from the 2015 figure of 11,160.
The latest figures reflect an overall drop in net migration figures for the UK — estimated to be 248,000 in 2016 which registers a fall of 84,000 from 2015.
This gives the fullest picture yet of the impact on immigration around the EU referendum vote in June last year.
Immigration from EU8 states — the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia — was down by 25,000 to 48,000, while those leaving the country increased by 16,000 in 2015, to 43,000 in 2016.
The figures will come as some relief to the ruling Conservative party, which has made cutting net migration an election pledge for the June 8 snap general election.
The Conservatives' aim since 2010 has been to reduce net migration to "the tens of thousands".
"It's good that the overall figure has come down now by nearly a quarter in a year. We're determined to make sure that we do continue to reduce the overall net migration number," said UK home secretary Amber Rudd.
A total of 9,634 people were granted asylum or an alternative form of protection in the year ending March 2017.
In addition, 5,453 people were granted humanitarian protection under the Syrian Vulnerable Persons Resettlement Scheme over the same period.