Delivering the inaugural India Link Lecture here on 'Indo-British Relations - The Way Forward', Lord Paul said, "The top students in our key recruiting nations are choosing to attend universities in Canada, Australia and the US."
"The UK is now seen as an unfriendly place for international students and we are fast loosing our place in the international market," he said.
"If the UK is to remain a leading international power, we must welcome students from across the world. If we do not, we will lose influence and our competitive position," Lord Paul said last night.
"Changing our immigration policies to remove students from the net migration figures will show the world that we are open to genuine, hard-working students from all nations. We must also provide opportunity for them to work in the UK for two years following their studies," he said.
Lord Paul's criticism of the changes in the UK's visa policy came a day after Cameron said in India that there was no limit on the number of Indian students in his country.
Lord Paul said he was disappointed with the negative worldwide publicity of the UK's visa system and the effect it is having on current and potential international students.
"In, May last year, I, along with 67 fellow University leaders in the UK Higher Education sector, wrote to the Prime Minister outlining our concerns about changes to the visa policy for incoming international students," he said.
"We asked the government not to include students in the net immigration statistics. However, the government chose to implement their policies and we are now seeing the repercussions," he said.
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