Theresa May is refusing to give way to pressure from India to relax visa restrictions on students coming from the country to the UK.
Ms May claimed the current system was already generous enough despite plummeting numbers of young Indians now enrolling in British universities.
Her resistance comes as she visits India, where Prime Minister Narendra Modi is urging her to open Britain's doors to more students.
But as she embarked on her three-day trip, she said: "The figures show that we issue more work visas to India than [to] the US, Australia and China put together.
"Nine out of 10 visa applications from India are already accepted. So we have, I believe, a good system."
Indian officials have blamed visa changes, introduced by Ms May as Home Secretary to prevent students from working in Britain after graduation, for a decline from 40,000 to 20,000 in young Indians enrolling in UK universities.
Mr Modi is expected to use talks on Monday to press her for liberalisation of the system, with government sources calling for Britain to be "responsive".
The Indian Prime Minister said: "Education is vital for our students and will define our engagement in a shared future. We must therefore encourage greater mobility and participation of young people in education and research opportunities."
Speaking to a technology summit in New Delhi, Ms May said that efforts to bring down barriers to trade must not wait until Britain leaves the EU.
She issued a warning that countries which fail to take advantage of opportunities to trade with like-minded partners will "stagnate" and make their citizens worse off.
Ms May also announced a new schemes to help wealthy Indian businessmen travel to the UK. Tycoons and their families will gain access to the Great Club programme which provides assistance with visa-processing, while an estimated 10,000 executives will benefit from a Registered Traveller Scheme to speed their way past queues at UK airports.
Heading to south Asia with a 33-strong UK business delegation, Ms May announced a new India-UK Urban Partnership to develop "smart cities" in the sub-continent.
Downing Street estimates the number of new jobs created by Indian investment in the UK in 2015/16 at 7,105, and officials said a further 1,370 are expected to be created by commercial deals due to be sealed during the PM's three-day trip.
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