It also confirms a massive drop in the number of Indians choosing the UK as a destination of choice for their university education.
Indian students accounted for approximately 9,600 visas granted in 2016 (or 7 per cent), but in 2010 they accounted for around one in five of visas granted at 40,500, the figures said.
The latest data coincides with results of a new exit-check system introduced in April 2015 with aim of building a more complete picture of whether those who entered the UK left when they were supposed to.
It indicates that figures of students over-staying may have been inflated in the past and has prompted UK's home secretary Amber Rudd to commission a new assessment of the impact of international students on the UK economy.
Ms Rudd has directed the UK's Migration Advisory Committee (MAC) to examine the impact both EU and non-EU students have on the labour market and economy whilst in the UK.
"There is no limit to the number of genuine international students who can come to the UK to study and the fact that we remain the second most popular global destination for those seeking higher education is something to be proud of," Ms Rudd said in a statement.
"We understand how important students from around the world are to our higher education sector, which is a key export for our country, and that's why we want to have a robust and independent evidence base of their value and the impact they have," Ms Rudd said.
The move has been widely welcomed by universities and other agencies involved in attracting more overseas students to the UK's shores.
"London is the world's most popular city for international students drawn by our world-class universities.
"Our analysis shows that India represents the fourth largest student population in the capital, contributing 130 million pounds in spend to the UK economy. It is vital that international students continue to feel welcome in our city and we look forward to helping more Indian students wanting to study in London," Mr Cooke said.
It is also hoped that the latest MAC assessment, due to report by September 2018, will add pressure on British Prime Minister Theresa May to remove student figures from the overall annual migration data.
"This is an opportunity to build on the considerable evidence that shows that international students have a very positive impact on the UK economy and local communities," said Alistair Jarvis, chief executive of Universities UK.
MAC has been asked to examine the impact of tuition fees and other spending by international students on the local and national economy, as well as the role students play in contributing to economic growth and the quality of education for domestic students.
The UK is the second most popular destination for international students, with four UK universities in the world's top 10.
But university chiefs have been warning of a fall in its popularity due to a perception that the country's visa policies make it an unwelcome destination.
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(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
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