The Indian-born entrepreneur said immigration has become the number one political issue “for all the wrong reasons”.
“What Nigel Farage is doing is damaging our country and it is dangerous,” said Lord Bilimoria, whose joint venture with global brewer Molson Coors generates retail sales of £160m a year.
He said everyone would agree that Britain needs to control illegal immigration to stop people taking advantage of a generous welfare system and he urged the Government to introduce exit checks at borders.
But Mr Farage is targeting all migrants to the UK, despite Britain gaining from an influx of people, ideas, energy and capital, he said.
He told The Yorkshire Post: “It is very damaging in that it sends out hugely negative perceptions to the outside world, diametrically opposed to our open, fair and tolerant attitude, which Britain has been renowned and respected for and our openness, which is one of our greatest assets as an economy.
“This is illustrated by people abroad feeling Britain is not welcoming to foreigners and potential foreign students saying - ‘Does Britain really want us?’”
Support for Ukip has spread in recent years as voters complain about being disenfranchised by the main political parties.
Ukip wants an Australian-style points-based system introduced into the UK. The right-wing party is bankrolled by Paul Sykes, the Yorkshire entrepreneur.
Net migration to the UK rose 260,000 in the year to June, up 78,000 on the previous year, according to latest figures.
Lord Bilimoria said: “This country would not be where it is without the benefits of immigration over the decades.”
He said an international and diverse team was one of the great strengths at Cobra and played a large part in the success of the business since its launch in London in 1990.
The combination of talents created an innovative, vibrant and powerful company, he said.
He said: “I used to call it a mini-United Nations. We had people from so many countries and backgrounds.”
He said Britain should be encouraging the brightest and the best people from around the world to come and start up new businesses in this country.
And he criticised the tougher visa regime for international students, which he said was responsible for the first fall in nearly three decades in the number of those coming to study in the UK.
Unlike competitor countries the United States, Canada and Australia, Britain treats international students as immigrants, he said.
Lord Bilimoria also criticised the closure of the post-study work route, which forces students to leave the UK after graduating.
He said Britain’s universities are the best in the world, even though the UK underinvests in higher education and research and development relative to its peers, and claimed that 27 world leaders are graduates of universities in this country.
He said the Government should introduce targets to increase the number of international students coming to Britain by 10 per cent a year. At present, they bring £13bn a year into the UK economy, he added.
Lord Bilimoria made the comments in an interview about Cobra’s campaign to promote its beer in pubs and upmarket bars in Leeds.
The beer is sold in 98.6 per cent of Britain’s curry houses and in major supermarket groups, he said.
He launched Cobra with a traditional Indian blend to provide people with a smoother, less gassy lager.
Laden with student debt
Karan Bilimoria was born in the north-west Indian city of Hyderabad in 1961.
He moved to London in the early 1980s and qualified as a chartered accountant at what became Ernst & Young.
He then graduated in law at Cambridge University and, laden with a student debt of £20,000, launched Cobra in 1990 to provide a smooth alternative to gassy lager and bitter ale.
He recalled an early visit to Leeds with a mentor of his who provided some invaluable advice as an entrepreneur: “They have one word that sets them apart - they have guts. Entrepreneurs are people who will take that plunge, that risk. Ideas are one thing. Action is another.”