Students from India declined by 12 per cent and Pakistan by 7 per cent, however, the United Kingdom received more Chinese foreign students than from the whole of the European Union, The Independent said, citing official data.
The report said that the government's clampdown on student visas and tough rhetoric on immigration had put many off coming to the UK.
Gordon Slaven, the British Council's director of higher education, described the decline of students from India and Pakistan as "worrying" and warned that the UK needed to be more proactive or risk losing talented students to competitor countries such as the US and Australia.
The number of international students, however, rose by 3 per cent to 310,195, the figures published by the Higher Education Statistics Agency showed, the report said.
Under current rules, international students can remain in Britain for four months to search for graduate jobs, which critics have already argued is too harsh compared with the US, Canada and Australia which allow 12 months.
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