Growing concerns that migrants see the UK as "closed for business" could be confirmed by official migration figures set to the be released on Monday.
Tory science minister David Willetts revealed yesterday that immigration curbs had "played disappointingly badly" in India despite prime ministerial charm offensives to show Britain welcomes students.
Ministers have been working "flat out" to attract international candidates but Indian press coverage about reforms to hit the net migration target has been "surprisingly negative", Willetts told Total Politics magazine.
Many EU nations have voiced concern over Bulgarians and Romanians arriving and applying for social benefits
David Hanson, shadow immigration minister, said: "Even members of the Cabinet believe that under David Cameron's Government and chaotic immigration system Britain is viewed as being closed for business.
"Immigration under Theresa May is a shambles with backlogs increasing, delays in visas for business visitors and hostile rhetoric to international students.
"It's no wonder David Willetts now accepts that all of this means that vital trading partners like India are simply put off from doing business with the UK under this government."
Against a backdrop of growing concern about the arrival of Romanians and Bulgarians when access restrictions to the UK labour market were lifted on January 1, Cameron unveiled further tough measures to clamp down on immigration.
New EU arrivals will not be able to claim benefits for three months when they land in the UK and once that period is up will only be able to claim out-of-work benefits for a maximum of six months unless they can prove they have a genuine prospect of employment.
In addition, those found begging or sleeping rough could be deported and barred from re-entry for 12 months unless they can show they have a proper reason to be in the UK, such as a job.
Other proposals previously announced will see migrant access to the NHS restricted, while landlords, employers, bankers and DVLA staff will all be expected to take part in checks for illegal immigrants under tough reforms.
In the last set of quarterly statistics from the Office for National Statistics, released in November last year, net flow of migrants saw its first annual increase for two years.
Rising to 182,000 in the year to June, from 167,000 the previous year, net migration moved further away from Prime Minister David Cameron and Home Secretary Theresa May's hopes of slashing the figure before the next election in 2015.
But recent recruitment figures from Romania have poured cold water on the notion that its citizens are desperate to move to Britain, and instead reveal how British businesses are wooing highly-skilled professionals from eastern Europe.
UK firms have increased the number of jobs on offer to Romanians so dramatically that there was fewer than one applicant per job, on average, in January this year. British employers offered more than 10,000 jobs to Romanians via recruiter Tjobs in the first month of 2014.
And warnings from the right-wing press that flights from Romania and Bulgaria were packed to the rafters and coaches sold out months in advance of January this year have proved misjudged, after a survey of travel companies found that transport was not sold out.