BT is planning to hire an extra 6,000 staff in India over the next two years in a bid to boost its operations there.
The Indian telecoms market is expanding fast
It has applied for international and national phone licences in India which would allow it to offer services direct to businesses for the first time.
It has also formed an alliance with Indian firm Jubilant Enpro in order to seek out opportunities in the market.
BT has had operations in India for almost 20 years but currently offers services via domestic operators.
BT, which already employs about 12,000 staff in India, hailed the move as a "landmark development".
"With these licences and planned investment, we will be able to provide the same high levels of service in Bangalore as we do in Boston and in Mumbai as we do in Madrid," said Andy Green, chief executive of the company's Global Services division.
India is one of the world's fastest growing telecoms markets but it is fragmented and service levels vary.
BT said it believed its Indian business could generate sales of $250m by 2009.