UK Trade and Investment (UKTI) published its '2012/13 Inward Investment Annual Report' revealing that 89 Indian FDI projects had helped create as many as 7,255 jobs in Britain.
It puts India in the top five inward investor economies in the UK with the US leading the charge with 396 projects and 48,802 jobs, followed by Japan with 113 projects yielding 7,442 jobs.
Italy and France come in a joint third with 93 projects each and 6,892 and 16,001 jobs respectively.
The figures compare favourably to UKTI's 2011/12 report, when India had emerged as the fifth-largest investor with 81 projects, creating 5,454 jobs.
China, with just 70 projects in 2012/13, has slipped from its position as third-largest investor with 92 projects in 2011/12 to sixth after Germany (78 projects).
"UKTI has led an improvement in the impact and senior-level business engagement in overseas trade visits. February 2013's Prime Ministerial ( David Cameron), 109-strong business delegation to India secured a range of deals and jobs and further demonstrated our ability to deliver high-impact, innovative and professionally organised visits," the UKTI report said.
"Looking to the future, the increased funding in the Autumn Statement 2012 will help deliver an ambitious package of support designed to reinforce the UK as the location of choice for Europe-bound investors, and to help deliver its aspiration to become the number one or two European destination for FDI from emerging markets, enhancing investment support in emerging markets including India and China," the report added.
The UK saw a total of 1,559 investment projects secured over the last year, marking an 11 per cent increase in the number of projects recorded during the previous year.
These projects are estimated to have brought with them 170,000 jobs to the British economy - 51 per cent higher than in the previous year.
Of these, nearly 60,000 were new jobs and 110,000 existing jobs were safeguarded.
"The UK has received a major vote of confidence from foreign investors confirming that the UK remains a world leading business destination," said UK Trade and Investment Minister Lord Green.
"Attracting foreign investment is an important element of the UK government's economic and growth programme and UKTI will continue to work with companies to help create and sustain a globally attractive, highly competitive and truly international economy," he said.
The latest figures come on the back of London-specific FDI figures released last week which established India as the second-largest investor into the city after the US.
Software services major Infosys led the charge of inward FDI by a total of 28 Indian companies, which generated 429 additional jobs for the London economy in the last year alone.