Immigration advisers say they are receiving death threats and abuse from clients struggling with long visa processing delays.
They say although the financial costs are immense, the damage to New Zealand's reputation as a destination could be devastating.
The vice-president of the national industry body, Licensed Immigration Advisers for New Zealand in India (LIANZ), Munish Sekhri, said they are doing their best to represent clients, but complaints are directed at them because of frustration at Immigration New Zealand (INZ) delays and lack of communication.
He said some advisers (LIAs) have started taking on more business from countries with smoother visa processes because of the misery, business risk and lack of support from Immigration New Zealand in India.
Students, partners of New Zealand residents and citizens and young children had been in the managed queue since November, with "no hope on the horizon that such applications will be decided any time soon".
"INZ has failed to respond to status check emails sent to them by the LIAs on behalf of the paying clients," he said.
"INZ has no client-facing arrangements, hence, LIAs are the ones who are being harassed by the clients and their families, due to the apathy of INZ.
"Whilst we understand that INZ is going through a massive transition, but there is no proper channel of communication available to the LIAs to advocate on behalf of the clients.
"I can count at least three applications in which the families are on the verge of a breakdown."
Staff in Mumbai had also requested education agents and immigration advisers not to send any status checks or reminder emails because it needs to concentrate on the visa backlog.
The licensed advisers pay fees in New Zealand and undergo training and continuous professional development to continue to practice in India, he said.
It's questionable whether Education New Zealand and the immigration system will ever recover from the current crisis, he added.
"Many LIAs and staff have received abusive calls and even death threats if the LIAs do not get/provide clarity of the processing times," he said.
"This has created another wave of insecurity and identity crisis for the LIAs, who, despite doing their best to represent the clients, are at the receiving end of threats, abuse, complaints, possible litigation and loss of revenue and reputation."
Immigration New Zealand has been approached for comment.