Nineteen Indian companies, including Tata Consultancy Services, Wipro, United Phosphorous and Thermax, set up operations in the United Kingdon last year.
About 60 per cent of the total foreign investments made by Indian companies in Europe in 2002-2003 were made in the UK, Invest UK said in its annual review.
"We are positioning ourselves as the gateway to European markets," Steve Firstbrook, Assistant Director (Inward Investment), Invest UK, told Business Standard.
"Indian companies are rapidly gaining a reputation for excellence and innovation to rival those from any country in the world," Firstbrook said.
He said knowledge-based investments continued to lead the way despite persistent fluctuations in the information technology and communications sector.
The other sectors which had attracted investments were biotechnology, pharmaceuticals, automotive, electronics and finance, he added.
Invest UK, which seeks to mediate between the British government and Indian firms, has targeted 25 new projects for commencement in the current financial year.
The agency is offering Indian investors services like estimation of costs, advice on legal and political issues, identification of potential markets and logistical support.
At present, it operates in 35 countries across the globe.