Participating in a debate on the Immigration Bill in the House of Lords, Lord Bilimoria said, "The prime minister (David Cameron) talks about Britain having to take part in a global race yet the government's insistence is on following this madcap immigration cap policy and targeting bringing down the immigration level to the tens of thousands. This is shooting ourselves in the foot."
"What are the government thinking of? Why do the government keep including student numbers in the immigration figures when Canada, Australia and the United States - our immediate competitors - do not? The prime minister has said that there is no limit to the number of students that we want to come to study in the United Kingdom."
Lord Bilimoria was also critical of the additional National Health Service charge of 150 pounds per year per student proposed to be introduced.
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"The proposed NHS fees are unwelcoming. As a former foreign student in this country, I know how expensive it is to study here. The average international student will spend something in the region of 75,000 pounds during a three-year degree programme."
"Visas granted to Indian students across all levels in Australia have risen by 22 per cent in the past year, following the introduction of a more open immigration policy, and visas granted to Indian students in Canada rose by 8 per cent in 2012," Lord Bilimoria said.
According to Business Secretary Vince Cable, around 17 billion pounds are generated each year by universities of which 10 billion pounds come from overseas students through their fees and expenditure.