Datawind was among four finalists in a competition organised by UK Trade and Investment.
The firm hopes the Ubislate, which sells for Â£22 ($35), will make digital connectivity more affordable.
The three other finalists in the Smart UK Project were Blippar, P2i and QRpedia.
Seventy-nine UK-based companies entered the competition in December.
A key factor in selecting the finalists was that they demonstrated the potential to become global businesses.
The winner of the competition was announced at the Mobile World Congress in Barcelona.
As well as the prestige of winning, Datawind will get free design consultancy and free software.
Russell Buckley, one of the Smart UK Project judges, said: "We were very impressed by the quality of all the finalists.
"It was a tough decision but we are very pleased that Datawind has won.
"There is a global potential and the will to transform lives and society, all using the resources of a British company."
Suneet Singh Tuli, chief executive of Datawind, said the result was a "great validation of our vision".
The makers of a 7in (17.8cm) Android tablet have been named "UK's Most Innovative Mobile Company".