Britain is pledging £14m for a four-year technology partnership with India that it hopes will generate thousands of new jobs across the UK.
The technology alliance, which will initially focus on developing driverless cars, virtual reality and artificial intelligence, follows on from the success of the UK-Israel Tech Hub, which generated £62 million worth of deals over the past five years.
The ambitious agreement will see British universities and businesses partner with states in India, working with the British High Commission in New Delhi, the Indian government and private sector to increase tech investment, exports and research and development. Businesses will be able to exchange staff, develop mentoring schemes and collaborate on emerging technologies.
The UK will initially invest £1m for a pilot in Pune, Maharashtra, to develop low emission and autonomous vehicles, battery storage and vehicle lightweighting. Additional connections to Bangalore with a focus on augmented and virtual reality, advanced materials and AI are expected to follow. It will potentially invest a further £13m by 2022.
Digital Secretary Matt Hancock said: "Our world-leading digital economy is booming, worth more than £116 billion a year and employing more than two million people.
"We're determined to see this incredible success continue, and this ambitious UK-India Tech Partnership will bring together some of the best minds working in tech to unlock its future potential and deliver high-skilled jobs and economic growth in both countries."
India has built a reputation as fertile ground for tech startups because it is one of the most connected countries in the world and is enjoying an increase in consumer spending as incomes rise.
The most up-to-date figures show that UK exported £358m of digital services to India in 2015. India already invests significantly in UK tech with close to 30pc of Indian companies’ 110,000 employees in the UK working in tech and telecoms.
Julian David, chief executive of techUK, said: “This is an incredibly important partnership and something tech businesses from both countries have been driving for. The UK and India are leaders in the development and use of digital tech, and there is a huge amount we can learn from each other and big opportunities to join forces in innovation.
"India is also a key strategic partner for the UK with world-class digital skills. Deepening our engagement will open up opportunities for business in both countries and help ensure we maximise the benefits of technology for our societies and citizens."