The announcement came after the meeting between United Kingdom foreign secretary Dominic Raab and his Indian counterpart external affairs minister S Jaishankar.
Addressing a joint press conference after the talks, Jaishankar said the two sides held four hours of discussion on a wide range of issues and focus has been on how to take the bilateral ties to a higher level.
"In recent years as you know, there have been very big changes in global politics and we both believe that our interests are better served by working together more effectively," he said and added that important issues, including the situation in Afghanistan as also developments in Gulf and evolution of the Indo-Pacific region were discussed.
Jaishankar said challenges posed by terrorism and radicalism which are shared concerns were also discussed during the talks.
"Prime Minister Boris Johnson has invited Prime Minister Narendra Modi to join the UK-hosted G7 summit next year. The UK Prime Minister has also accepted the very generous invitation to attend India's Republic Day celebrations (as chief guest) in January which is a great honour," Raab said.
Describing India as a key player in the Indo-Pacific region, Johnson said on Tuesday that his visit will mark the start of an "exciting year" for Global Britain and deliver a "quantum leap" in the bilateral ties.
Downing Street said that trade and investment, defence and security, health and climate change have been identified as some of the priority areas of focus on both sides for the visit in the New Year.
"I am absolutely delighted to be visiting India next year at the start of an exciting year for Global Britain, and look forward to delivering the quantum leap in our bilateral relationship that Prime Minister Modi and I have pledged to achieve," said Johnson.
"As a key player in the Indo-Pacific region, India is an increasingly indispensable partner for the United Kingdom as we work to boost jobs and growth, confront shared threats to our security and protect our planet," he said.
This will be Johnson's first major bilateral visit since taking office last year and the first since Britain's exit from the European Union.
While the complete schedule of the visit will be detailed only closer to the time, the UK prime minister is confirmed as the chief guest for Republic Day celebrations on January 26, 2021, following Modi's formal invitation extended to him during a phone call last month.
Johnson will be only the second British leader since Indian independence to attend the annual Republic Day parade in New Delhi as Guest of Honour, after former prime minister John Major in 1993.
On his part, Jaishankar said Johnson accepting the invitation for the Republic Day was, in a way, symbolic of a new era in Indo-UK ties.
Raab's three-day visit to India from December 14-17 comes at a time the UK is holding complex negotiations with the European Union on reaching a post Brexit trade deal.
In the wake of Brexit, the UK has been looking at ramping up trade with leading economies like India. There have been apprehensions that its separation from the European Union without a trade deal could severely cripple its financial markets and may have long-term implications for its economy.
The British foreign secretary is scheduled to meet environment minister Prakash Javadekar and education minister Ramesh Pokhriyal.
Raab will also travel to Bengaluru where he will meet Karnataka Chief Minister B S Yediyurappa on December 17.
Downing Street said that Johnson had written to Prime Minister Modi not only to accept his invitation but also to invite India to attend the UK's G7 Summit as one of three guest nations alongside South Korea and Australia with a focus on his declared ambition to work with a group of "like-minded democracies" to advance shared interests and tackle common challenges.
In 2021, the UK will host both the G7 Leaders' Meeting and COP26 Summits, as well as a global education conference aimed at getting girls into school, and an event to mark the first meeting of the UN General Assembly in London in 1946.
The UK and India are described as "significant investors and markets" for each other's economies and, according to official data, the growing trade and investment relationship is worth around 24 billion pounds a year, supporting more than half a million jobs.
There are 842 Indian companies in the UK with a combined turnover of 41.2 billion pounds, creating jobs in all corners of the UK.
That includes 19,500 people employed by Tata Consulting Services at sites including Peterborough, Liverpool, and Edinburgh; around 5,700 people in Warrington, Derby, Cardiff, Derry/Londonderry and Belfast working for business support firm Firstsource Solutions which is soon to open a new office in Middlesbrough; and 1,200 people employed by Accord Healthcare Ltd in Newcastle and Barnstaple to manufacture and supply medicines to the National Health Service (NHS).
"As the 'pharmacy of the world' India supplies more than 50 per cent of the world's vaccines, with over a billion doses of the UK's Oxford/AstraZeneca vaccine being manufactured at India's Serum Institute in Pune," Downing Street noted in a statement.
"Our countries have cooperated closely throughout the coronavirus outbreak to maintain the flow of medical goods for our citizens. The UK has received 11 million face masks and 3 million packets of paracetamol from India during the pandemic, and we continue to work together to keep vital supply chains open," it said.
Official statistics show that there are more than 400 British companies in India, including those at the forefront of the collaboration to tackle climate change.
Besides, Downing Street highlighted the India-UK partnership is creating jobs and opportunities for UK firms in areas such as renewable energy and electric vehicles, as the countries work together to reduce global emissions ahead of next year's COP26 Summit in Glasgow.