Immigration advisers in India may "flirt with the law" if New Zealand authorities keep working with unregulated education agents.
The warning comes from the Licensed Immigration Advisers for NZ (Lianz), a group representing all India-based, licensed New Zealand immigration advisers.
Representatives are in Auckland to make a submission demanding mandatory licensing for overseas student advisers.
At a meeting with the Immigration Advisers Authority today, it will also seek legislation to regulate the commissions being paid for recruiting international students.
Lianz spokesman Munish Sekhri said Indian students were being falsely promised automatic pathway to residence by education agents.
Since May 2010, people giving immigration advice are required by law to be licensed, but those providing education advice are exempt.
"The unlicensed agents are playing with the careers and lives of thousands of students who are landing in New Zealand just to see their dreams shattered, and tarnishing the image of New Zealand," said Mr Sekhri.
"[They] are blatantly advertising the services, which otherwise only licensed advisers can provide, but there is no action against them."
Mr Sekhri said some licensed advisers felt it did not make business sense to be operating within the law.
"If Education NZ and education providers have the right to think about their profitability, licensed immigration advisers may also be forced to flirt with the law."
India is New Zealand's fastest growing international student market, worth over $430 million to the New Zealand economy.
Last year, Immigration New Zealand earned $24.6 million in revenue from processing student visas, $7.7 million of which came from India.
However, the agency said it has now become aware of "risk and fraud" in the Indian market.
Nearly a third of the 29,406 Indian nationals who applied for student visas between March last year and the end of February were declined.
In the past financial year, 206 existing Indian student visa holders failed to get a further visa to continue their studies, putting India on top of Immigration's declined nationalities list.
Michael Carley, Immigration's area manager, said the exemption of offshore student advisers was being looked at in the current review of the Immigration Advisers Licensing Act.