India Isn’t Just Outsourcing Any More – It’s a True Tech Innovation Partner

When British business leaders think about India, the first image tends to be of a call centre or the software outsourcing hub. Cheaper labour at half the cost. That stereotype has long embedded itself in UK-India commercial relations. Yet if you spent time in Coimbatore or Bengaluru in 2025 you’d see a very different story, one of high-level product-led innovation, SaaS platforms scaling globally, and high-calibre engineering teams working on complex enterprise and AI problems.

I’ve seen this firsthand. I’m the founder of Kovai.co, an enterprise solutions company built from the ground up without outside investment. We’re headquartered between London and Coimbatore, with enterprise customers around the world, including the NHS, Tickmaster, McDonald’s and VMware. And we’ve just passed $10 million in annual recurring revenue (ARR) for one of our fastest growing products Document360.

We’re a UK-India business in every sense. And as the UK looks for greater growth and global partnerships beyond Europe or the US, it’s time we recognised that India isn’t just a back office support system anymore. It’s a frontline partner in innovation.

Why the old outsourcing lens doesn’t work anymore

Despite being one of the highest sources of foreign direct investment (FDI) into the UK by number of projects (in 2024–25, India was the UK’s second-largest source of FDI projects, behind only the United States), India is still talked about mainly in terms of cost: lower labour costs, cheaper developers, offshore savings. History makes that mindset understandable, but it is an outdated assumption and one not backed by evidence or experience.

According to UK government statistics, in the four quarters to end of Q3 2025, the total trade in UK-Indian goods and services reached £47.4 billion, which is an increase of just shy of 12% when compared to the previous year. UK exports to India were valued at £18.9 billion (up 13%), while imports from India reached £28.5 billion. This has meant India is now ranked as the UK’s 11th largest trading partner, accounting for approximately 2.5% of total UK trade. And by the stats alone is a growing partnership.

Key to understanding India’s place in today’s tech world is to understand that India is building. Across SaaS, fintech, logistics and AI, you’ll find teams with true world-class talent innovating and creating products to a global customer base. Look at platforms such Freshworks, Zoho, BrowserStack and Chargebee – all have shown that India isn’t just servicing the West, it’s competing with it.

What’s driving this shift? Partly, it’s down to the sheer volume of talent. India adds over 1.5 million engineers annually to its workforce. That’s 1.5 million people who each bring a new brain to new problems. But more importantly than just weight of numbers, the ambition of the Indian tech sector has changed. Where once the best minds would join outsourcing firms, today they want to build startups. They want to compete on the global stage. The support infrastructure from accelerators, venture capital, experienced operators, is growing fast. So is the customer base. As more Indian firms adopt SaaS and cloud technologies, there’s a huge domestic proving ground for innovation, as well as international reach.

Numbers matter because they reveal the scale of opportunity. But they can also reinforce the simplistic view that India is a supplier of labour and capital rather than ideas. To shift that narrative, consider three observations from our own experience building cross‑border SaaS products.

1. India’s talent pool has moved beyond outsourcing – Indian engineers are building global SaaS products, not just delivering outsourced code. Today’s talent pool matches Western peers in quality, price, and product experience, giving founders a real platform for innovation.
2. A dual‑jurisdiction model enhances innovation and trust – By combining UK-based legal and commercial credibility with India’s deep product and engineering strength, cross-border firms are better equipped to scale, operationally and reputationally, than single-market rivals.
3. Capital efficiency builds resilience in a high‑rate world – In a high-interest, post-VC boom world, capital-efficient models built on fundamentals, not hype, are proving more resilient, more investable, and more trusted by customers and partners. This focus on capital discipline also influences cross‑border cooperation. UK businesses seeking to work with Indian partners should not view them as contractors to be squeezed but as co‑investors in product success.

A London-Coimbatore model

When we launched in 2019, we made a strategic decision to build the company between the UK and India. London is a strategic and commercial base. Coimbatore is our product and engineering hub. That combination has worked better than we ever expected.

We chose Coimbatore, not Bengaluru or Hyderabad, because we believed in building away from the noise. And the culture that is created is unique. Most of our 300+ team are based in India, but our product is proudly global.

This model has enabled us to scale sustainably. We’ve never raised external capital. We’ve grown bootstrapped, through customer revenue, reinvestment and discipline. In a world of venture-backed burn and boom-bust cycles, that’s become a differentiator in itself.

We also benefit from deep cultural fluency. As an immigrant founder in the UK, I understand both ecosystems, how British businesses think, how Indian engineers solve problems. That’s been a huge advantage for companies when working with multinational clients who need both precision, access and speed.

Why policymakers need to rethink UK-India strategy

Too often, when government or trade bodies talk about tech partnerships with India, the focus is on visas, tariffs or BPO. We should be talking about something else: co-creation.

There’s an entire layer of mid-market, cross-border SaaS companies emerging between the UK and India. These are firms building real intellectual property, with teams on both sides, solving real-world business challenges. They’re not household names (yet), but they’re the backbone of a new kind of innovation economy, and they need support.

That support isn’t just about policy. It’s about mindset. The UK must recognise Indian tech as a peer, not a subcontractor. That means creating bilateral innovation sandboxes. It means making it easier to hire across borders. And it means elevating stories of successful product companies, not just service exports.

The current UK-India trade deals represent an opportunity to embed some of this thinking. Let’s stop looking backwards and start building a partnership fit for 2030.

What the new UK-India partnership could look like

If we get this right, there are major benefits for both Indian and UK businesses. UK companies gain access to top-tier tech talent pools, with deep product expertise and faster time-to-market. Indian companies, meanwhile, gain credibility, global go-to-market strategies and access to strategic clients. 

More importantly, we move beyond the transactional. This isn’t just about cost arbitrage. It’s about joint IP, shared roadmaps and truly global teams. It’s about a founder in London co-building with an engineering lead in Tamil Nadu. It’s about shared history and shared values on privacy, trust, resilience, that distinguish us from China or the US.

We’re already seeing this in action. AI features, for example, co-developed by teams across both continents. We’ve seen huge demand from enterprise clients trying to modernise knowledge management and reduce support workloads. That demand isn’t coming from one geography, it’s coming from everywhere.

A final word to UK entrepreneurs and investors

If you’re a founder building in the UK, my message is simple: look East. Not for cost savings, but for collaboration. Find partners who understand scale, complexity and global ambition. Build a culture that spans markets. And don’t wait for permission, the future of innovation will be borderless, whether we like it or not.

If you’re an investor, ask where your portfolio’s engineering leverage lies. Ask whether the founders you back are thinking globally from day one. And ask what your India strategy is  because your competitors already have one.

India is no longer just the world’s back office. It’s the world’s product studio, AI lab and SaaS launchpad. The UK has a once-in-a-generation chance to partner with that momentum.

Let’s not waste it.