Dilraj Singh spent most of his high school years in India's northern Punjab state dreaming of studying abroad in Canada, but he's now abandoned that plan. 

"Students are really suffering in Canada for getting jobs," Singh said.

Singh, 21, said he's also heard recent negative comments from friends living in Canada about the high cost of living and weak labour market in a country that accepts more Indians as international students than any other nationality.  

"I do not know if that is a myth or a real thing," he said. "But that's why I don't consider Canada as my top option now." 

He's applying to go to Australia instead, where his older brother lives and where he might like to pursue a master's in business administration. 

A declining interest in Canada as a study destination for Indian students is a trend that's intensifying, according to numerous Punjab-based study abroad consultancy companies that spoke with CBC News.

Adding to the turmoil for aspiring students is the recent announcement from the Canadian government that it would reduce the number of international student permits it hands out by another 10 per cent, following a temporary cap instituted earlier this year.  

The policy is sowing confusion among prospective students, said Sumit Jain, director at Jain Overseas, an immigration and study abroad consultancy company based in Jalandhar, Punjab.  

'More questions than answers'

"All year, Canada has been [releasing] information in bits and pieces," Jain said.

"They are not coming up with concrete information in one go. So every time it leads to more questions than answers." 

Immigration, Refugees and Citizenship Canada (IRCC) processed 15 per cent fewer study permit applications from India in 2023 than in the previous year. 

The federal department's most recent data shows that from January to July of 2024, there were a total of 107,385 Indian study permit holders in Canada, with a 20 per cent drop in June of this year compared to June 2023. 

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Jain has been in the study abroad business for 15 years and Canada has always been the most attractive option for students. But now, Jain said about 70 per cent of the students his company helps are "in limbo" and adopting a wait-and-see approach before applying to study in Canada. 

Twenty per cent of his students have already crossed out Canada and opted for other countries like Germany, the United States or the United Kingdom, he added.  

Modified rules

As part of the modified rules, Ottawa is putting new limits on work permits for spouses of both foreign workers and students in master's degree programs. The government has also more than doubled the cost-of living financial requirements for international student applicants. 

The moves came amid concern about the impact growing numbers of international students are having on the housing market. The number of international students in Canada nearly tripled in the past decade, to more than one million last year from around 350,000 in 2015, according to government data.

IRCC numbers show that India sends the most students to Canada, with China a distant second. There is not a lot of regulation over the industry, leading to charges that some private colleges are recruiting foreign students for their high tuition fees by offering a path to permanent residency. 

Explaining the newly changed rules is a challenge for many education consultants in India. 

"I know their dreams are on hold. It's very tough to tell [students] about this," said Jain. 

The drop in interest from Indian students is consistent, said a representative from another study abroad consultant company.  

"We used to send thousands of students, but right now the numbers have decreased to 25 per cent of what we used to do last year," said Pavneet Sidhu, who works with the Chandigarh-based Gem Overseas. 

"I would say 60 to 70 per cent of students have lost their interest [in Canada]." 

Sidhu said many students who used to want to go to Canada are now asking about Germany, France and Finland.

"These are countries that we were not even aware that students used to talk about [going to] before." 

Dilraj Singh said countries other than Canada are top of mind for most people in his circle of friends in Jalandhar, as he works on his application to get an Australian study permit. 

"All of my friends are suggesting that I don't go to Canada," he said. "They are also not considering Canada as their option at all."