THE number of overseas students studying at Scottish universities has fallen in the wake of tough new immigration rules introduced by the Westminster Government.
Official figures show there was a 4% decline in overseas postgraduate students and a 4% drop in the number of first year undergraduate foreign students.
The biggest fall has involved students from India, with numbers dropping 30% in a single year.
Overall there was a 1% decline in foreign students studying in Scotland between 2011/12 and 2012/13, with numbers dropping from 28,500 to 28,350. The overall decline would have been steeper without an increase in the number of students from China.
The figures, from the Higher Education Statistics Agency (Hesa), come as fears grow over the future flow of overseas students to UK institutions as a result of Westminster's immigration policy.
Tougher visa restrictions were introduced by the Home Office after widespread concern at the proliferation of bogus colleges operating as "visa shops".
As a result, overseas students have found it harder to secure a place and have limited rights to work after they complete their studies.
The decline in numbers is significant because universities rely on the lucrative fees paid by overseas students to subsidise courses for Scottish students - with institutions charging as much as £17,000 a year.
Scottish universities saw their income from overseas students rise to a record £337 million last year, accounting for 12% of total income.
In addition, international students also contribute an estimated £441m to the Scottish economy annually.
Universities Scotland, which represents university principals, called for reforms to immigration controls.
Alastair Sim, director of the organisation, said: "The decrease in international student recruitment to Scottish institutions in 2012/13 adds further urgency to our long-standing campaign for the UK Government to consistently support the migration of high-talent individuals.
"The UK Government's current mixed messages are detrimental to the interests of universities across the whole of the UK, including Scotland.
"While we recognise there have been some positive developments from the UK Government in recent months, such as the publication of the international education strategy, more action needs to be taken given how important international students are to Scotland's economy and society."
Gordon Maloney, president of the National Union of Students Scotland, said: "We know that immigration is good for our country and good for our universities. It's disappointing that we've seen a decrease in the numbers of international students studying in Scotland.
"The vast majority of the blame lies squarely with the Westminster Government's draconian immigration laws. It's simply illogical for students to be included in the net migration target, sending out the wrong message across the world."
However, he also urged Scottish universities to reduce the "ludicrous fees" charged to international students.
The Hesa figures also show there was an 8% rise in undergraduates from the European Union from 11,355 to 12,240.
This rise will concern some as these students have their fees paid for them by the Scottish taxpayer under EU law and compete directly with Scottish students for places. However, more up-to-date figures on applications show there has been a decline since 2012/13.
The Hesa figures also show for the first time the impact on Scottish universities after they began charging annual fees of up to £9000 to students from the rest of the UK (rUK).
Students from England, Wales and Northern Ireland rose by 6.4%, with an additional 300 students taking the total to 4805.
There was also a 2% increase in Scots studying in Scotland, with numbers rising from 28,710 to 29,225.
Education Secretary Michael Russell said: "We have protected places for Scottish students at Scottish universities."