How Britain can keep its place in India's next tech boom
Amidst the rapid advance of artificial intelligence, some have been warning that India – a country that dominates the tech outsourcing sector – would lose out. But that has not come to fruition. If anything, India is poised to become one of the global AI leaders. The question, now, is who benefits from it, and whether Britain has a role in what comes next.
India's place at the forefront of this sector is long-standing. For over 30 years, its tech experts have been the first port of call for software outsourcing and back-office support. This key market grew exponentially at the turn of the millennium, amid widespread panic within major tech corporations that the “Y2K Bug” would cause computer code to crash worldwide.
These companies rushed to hire India’s English-speaking technical talent, who successfully rewrote hundreds of millions of lines of code. As a result, the Indian software industry’s value skyrocketed from $1 billion in 1997 to $6.2 billion by 2001, and grew to an astounding $224.4 billion by 2025. Despite concerns about how its existing infrastructure will adapt to the changing needs of the industry, everything is in place for India to drive the global tech transformation.
The country is poised to deploy $25 billion into deeptech, with the Government alone investing $11 billion under the Research Development Infrastructure fund, which will be matched by venture capital and private equity fund managers.
Along with the additional international investment flowing into India, it sets up what could be one of the world’s largest tech booms across AI models and diffusion, semiconductor manufacturing, data centre infrastructure, and other bleeding-edge technologies including spacetech.
Britain is, arguably, one of India’s closest trade partners, and should be well placed to take a significant role in whatever comes next, but its reticence to commit capital risks opening the door for other countries to take its seat at the table. Without swift action to inject funds into the country’s tech industry, the potential losses are huge.
That would be an immense waste, because the two countries are more strongly linked than most. Deep commercial links, a large and integrated diaspora, and, most importantly, a freshly enacted trade deal, mean the ties are strong. In effect from July this year, the UK-India Free Trade Agreement (FTA) removes tariffs on 99% of Indian exports and over 90% of UK exports, paving the way for better movement of goods and services.
The deal is also supported by the UK-India Technology Security Initiative (TSI), a diplomatic framework signed in 2024 which was designed to encourage collaboration in the development of cutting-edge technologies, and should place the UK in an even stronger position to contribute to and capitalise on India's momentum.
The problem is that the trade deal and the TSI don't guarantee Britain a role in India's incoming technological boom. Given the country is also yet to make large-scale capital investments, it's facing a closing window to make the most out of its strong relationship with India.
That window is made smaller and smaller with every fresh investment made by other countries and corporations around the world. The Swedish EQT Group, for example, plans to invest $50 billion in India by 2030 through data centres, renewable energy, and private equity, while the US's Amazon announced in June that it will invest $48 billion by 2030, including $13 billion dedicated to expanding and supporting AI and cloud infrastructure. Microsoft also recently launched a four-year, $20.5 billion investment project, which included the opening of its largest Indian data centre yet in Hyderabad.
Other countries are also taking positions, with South Korea, Japan and the UAE committing to injecting hundreds of billions of dollars over the next few years. In fact, the UAE plans to match India’s $25 billion fund, with a long-term goal of hitting $100 billion in cumulative investments to support the development of its technical talent base.
In contrast, the UK government has made comparatively tiny investments, which include a £7 million joint telecom research programme and a £24 million commitment to develop the India-UK Connectivity and Innovation Centre.
If Britain stands any chance of cementing its role in India's future thriving technology sector, it needs to make far more emphatic moves, and quickly. I have no doubt in my mind that India will lead the way – throughout my life I've seen first-hand the innovation, drive, and hustle and bustle that make India unique. It's why I plan to return there upon my retirement, and it's why other countries are betting big on its success.
The more they dive in with record levels of investment, the more vital it is that Britain does the same. Its historic links with India put it in a fantastic position, but if the UK is to truly play a role in the country's technological renaissance, capital must start moving.
Sukhpal Ahluwalia is an Indian entrepreneur and investor based in London. He acts as Executive Chairman for GSF Car Parts, the fastest-growing car parts distributor in the UK, and is Founder and Non-Executive Chairman of Dominus, a real estate and private equity business. At age 18, Sukhpal founded Euro Car Parts – the business he is best known for – starting from a single motor accessories shop in north-west London and growing the business into the largest vehicle parts distributor in the country. He sold the company in 2011.
