Britain is offering 396 new scholarships across 57 British universities for graduate and undergraduate students from India as part of efforts to counter rapid declines in student numbers.

Speaking ahead of a week-long visit to India, British Business Secretary Dr Vincent Cable said they were increasing the number of scholarships for Indian students under the county’s GREAT Scholarship programme for 2015 as they sought to counter the growing perception that foreign students weren’t welcome in the country.

Cable, a Liberal Democrat member of the ruling coalition government, stressed that his party had repeatedly pushed for changes to recent changes to Britain’s immigration regime. While there is no cap on the number of non-EU students allowed to study in the country, tough new rules, including restrictions on the post-study work visa, have discouraged Indian students from applying to the UK. The number of Indian first year students in 2012-13 fell by 25 per cent to 22,385 from the year before according to Government figures published in January. It is a 42 per cent drop on 2010-11 figures.

Cable said that the fundamental problem remained the ruling Conservative party’s target of reducing net immigration: because overseas students fall within immigration numbers, a fall in the number of foreign students helped them towards this target. “The Conservative side sees the reduction in students as a good thing because it helps them meet their immigration target. What we are saying and the universities are saying is that this is silly – this is a British export and these people make a massive contribution to the UK, they are good for the British economy and good for British exports so why are we treating them like this.”

The GREAT scholarship scheme has been in place since last year, and had initially offered 370 scholarships for Indian students hoping to study in the UK in fields such as engineering and IT.

In addition, another scheme, enabling Indian alumni of UK institutions to re-visit their university, is also being launched.

Cable’s visit follows a string of UK ministerial visits to India since the general election. Cable, who kicked off his visit in New Delhi on Friday, is set to visit Chennai, Pune and Goa. In Chennai, he is set to visit Ashok Leyland – a major investor in the UK through its premium bus maker Optare. A number of UK-India investments totalling will also be unveiled during his visit, including Amtek Auto’s £23-million investment in a new foundry in the UK, creating 500 jobs. The company is a supplier to Jaguar Land Rover and Ford.

Cable said he would also use the trip to establish opportunities for collaboration between the two countries on the Bangalore-Mumbai Economic Corridor, in which Britain has repeatedly stressed its interest but for which British funding is yet to materialise. “We are keen to encourage it and make a contribution to it but the issue we have is that where British companies are strong are in specialist areas…we do specialist services and we would like to be involved in those big projects but not just doing it on a turn key basis.”

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