Indian students and others from outside the European Union will turn away from British universities if they are treated merely as "cash cows", the chief executive of the British Council has warned.
Every year, thousands of students are recruited in India by agents of British universities.
While most of them enjoy and benefit from the experience of studying in the UK, many are disappointed at the lack of attention and low quality of education at some universities.
Indian students pay at least three times the fee applicable to British students, which means that if a British student pays 3000 pounds for a one-year Masters course, an Indian student will pay at least 9,000 pounds for the same course.
British Council Chief Executive Martin Davidson said: "International students have more study options today than ever before and in an internet-connected world word quickly spreads when it appears a university regards them as little more than 'cash cows'".
He added: "In today's rapidly evolving marketplace, overseas governments will react against foreign universities that are clearly only interested in recruiting students from their country and giving nothing in return."
Over the years, students from India and elsewhere have turned into a major income stream for British universities and their importance has now been further accentuated by the Labour government announcing major funding cuts to universities here.
The British Council said that the funding cuts may prompt universities to enrol more non-European students to plug holes in declining budgets, but said such a "crude" student recruitment drives could undermine the reputation of UK higher education.
"It would be seriously counter-productive and, in the long run, potentially self-defeating, for universities to focus on intensifying student recruitment drives as a knee-jerk reaction to current financial difficulties and state funding cuts," Davidson said.
"In this challenging economic time, it is more important than ever to take a balanced, strategic approach that builds on the firm foundations we have all worked so hard to lay."
An approach to international working which includes student recruitment as part of a wider portfolio would ultimately pay dividends in the long run, the chief executive added.