The number of international students coming to England for higher education has "reduced significantly" for the first time in nearly three decades, according to the University and College Union.
Commenting on new figures highlighting the decline, the UCU warned that international students are choosing to go to countries "that make an effort to welcome them".
A report by the Higher Education Funding Council for England (HEFCE) found a downturn in international student enrolments between 2010-2013 - the first time in 29 years.
It found the number of p ostgraduates from India and Pakistan halved in that period despite their numbers growing in other countries.
Overall the number of full-time postgraduate students from overseas dropped by 1% (1,000 students), compared to double-digit growth in previous years.
The UCU blamed tough domestic rhetoric on immigration and changes to student visas for damaging the UK's image abroad, especially at a time when other countries were doing more to attract international students.
In 2012-2013 non-UK students still made up the vast majority of places (74%) on full-time masters programmes, while 26% were UK students.
The study also found that almost as many Chinese students and English ones are studying full time masters courses as a result of growth in Chinese entrants, coupled with a decline in traditional UK postgraduate markets like India, Pakistan and Iran.
UCU general secretary Sally Hunt said: "International students make a huge contribution to academic and cultural life on campuses and in our cities.
"They also make a valuable contribution to our economy. As we face continued uncertainty about the future of funding for our universities, the Government should be doing more to encourage foreign students.
"Ministers need to recognise that attempts to sound tough on immigration at home are also reported elsewhere and it is not surprising if students consider studying in the countries that make an effort to welcome them."
The study also found there was nearly a quarter fewer undergraduates coming over from the EU in 2012-2013, possibly as a result of increased tuition fees.
Professor Madeleine Atkins, chief executive of the HEFCE, said: " This new analysis from HEFCE expands our understanding of global demand for English higher education.
"International students enrich our universities and colleges - and our society - academically, culturally, and through their contribution to the economy.
"Supporting high-quality international education is a crucial part of ensuring that the UK continues to engage with, and benefit from, the increasingly interconnected world."
A Business Department spokesman said: "International students make a huge contribution - boosting our economy and enhancing our cultural life.
"That is why there is no cap on the number of legitimate students who can study here. By working with other countries we will continue to attract international students and promote the UK's expertise in education."
A Home Office spokesman said: " We do not accept that changes in the immigration system are deterring international students from coming to the UK.
"Worldwide, the UK remains the second most popular destination for international higher education students and our universities saw increases last year from key markets, including China (up 6%), Malaysia (up 3%) and Hong Kong (up 15%). There is no limit on the number of students who can come to the UK.
"The latest figures show a rise of visa applications of 7% across the board last year, with an 11% increase to our world-class Russell Group universities. It underlines that we continue to attract the brightest and best students from overseas while driving out abuse elsewhere."
Labour immigration spokesman David Hanson said the figures showed the "failure" of Home Secretary Theresa May's policies on migration.
Mr Hanson said: "Despite growth in the global student market, students from key economies like India and Japan are going down, harming our economy both now and in the future, showing just how ill-thought through her anti-student rhetoric has been.
"The Government is failing on all fronts - and the result is that the best and brightest from the world are increasingly choosing not to study here; costing the UK economy revenue, goodwill and hindering our universities' ambitions to be the world's best."
Asked if the Prime Minister was disappointed by the figures, David Cameron's official spokesman told a regular Westminster media briefing: "What we see is an increase within the figures of students from China, from Hong Kong, from other parts of South-East Asia, and that is very much to be welcomed.
"We are going to continue to make the case for the attractiveness of British universities."