Speaking to the Huffington Post UK, the India-born crossbench peer lashed out at the eurosceptic party for their "complete scaremongering" and "misleading rhetoric" about immigration.
"I think that this country would not be where it is without all the benefits of immigration taking place over the decade," he said.
"We are where we are, one of the top 10 economies and at the top table of the world, mainly because of the input of immigrants and the religious and ethnic minority community."
Lord Bilimoria's comments come after retail tycoon Theo Paphitis told HuffPost UK that it was "nonsense" to say that migrants were "robbing" native Britons of their jobs.
Citing academic research, Lord Bilimoria pointed out that immigrants from the European Union have made a "huge" contribution to Britain's economy.
"They're young, they work hard, they pay their taxes, they do not use the NHS as much and they do on the whole use the benefits system less. Of course you've got to clamp down on the people who abuse our benefit system, but they're in the minority."
Immigration minister James Brokenshire caused controversy in March after he condemned "employers who wanted an easy supply of cheap labour" for encouraging immigration. Meanwhile, Nigel Farage insisted he was "tired out" when he spoke in May about the undesirability of Romanian neighbours.
Lord Bilimoria accused Brokenshire of talking 'absolute nonsense", while dismissing Farage's "dangerous and ridiculous comments", adding: "How people can take Ukip seriously is beyond me...!"
The peer was speaking after appearing at the Enterprise Research Centre's State of Small Business Britain conference at the International Festival for Business in Liverpool.
Vicky Pryce, the government's former chief economist, told HuffPost UK that she was worried about the rise of self-employed Britons in the wake of the financial crash.
Pryce, now chief economic adviser at the Centre for Economics and Business Research, said: "It absolutely does worry me because those firms will not grow.
"Although it is better to have people doing something, we need to look at that self-employment trend very carefully and in my view we don't always do that."