The number of scholarships offered to Indian students will be quadrupled under plans unveiled by Business Secretary Vince Cable on Friday.
Mr Cable said more than £1.5 million will be set aside to fund 396 scholarships at 57 British universities as part of efforts to counter what he described as the "ugly noises" about immigration emanating from Conservative Party ministers within the Coalition.
Mr Cable was speaking ahead of a trip to Delhi aimed at boosting trade between the UK and India.
"I am concerned that a rhetoric from a minority of British politicians has damaged perceptions of Britain (in India)", Mr Cable said.
"A general feeling of negativity has been created and we just have to argue against it and rebuild positive feeling and confidence", he added.
The new scholarships are available for both undergraduate and graduate programs and will be for the 2015 academic year.
Tougher new visa rules introduced since 2011 has seen a sharp decline in the number of students
Figures published by the Higher Education Funding Council for England (HEFCE) in April showed that since 2010/11, the number of Indian postgraduate students coming to the UK has fallen by 51%, with those from Pakistan down 49%.
"There's a bit of an uphill struggle against Indian opinion, but it's an important task for the health of our universities that we make that case," Mr Cable said.
While ministers have insisted that there is no limit to the number of international students coming to the UK, the government's new visa regulations and moves to close down 'bogus' colleges has been blamed for putting off international students who contribute an estimated £3 billion to the British economy.
Mr Cable acknowledged that there had been abuse of the visa system, Mr Cable said that the government had given the impression that it was widespread.
Mr Cable also said that overseas students should not be included in government immigration statistics.
"It's part of this wider argument about overseas students where, as you know, they're included in the immigration statistics, even though they're not immigrants. Clearly, one side of the coalition is pursuing a reduction in the net migration figure, from their point of view if they can get student numbers down it helps them meet their target, whereas actually these students are not immigrants and they are making a positive contribution to the economy.
In addition to the new scholarships Mr Cable is set to announce a £33 million investment in projects that will boost the UK's business relationship with India.
Indian graduates of UK institutions that have made a "significant impact" upon their return to their home country are also to be offered the chance of an expenses-paid study trip to the UK, linked to their profession, through the Education UK Alumni Awards.BLOG COMMENTS POWERED BY DISQUS