Auto Refresh GridView inside Update Panel with Database using C# and VB.Net in ASP.Net

Just add Update panel for GridView no need to add Update panel for Textbox and button which is Outside of GridView else it will raise same problem of losing cursor focus from the controls.

Refer the below sample for your reference.

HTML

<div>
    <asp:ScriptManager ID="ScriptManager1" runat="server">
    </asp:ScriptManager>
    Name:&nbsp;<asp:TextBox ID="txtName" runat="server"></asp:TextBox>
    <asp:Button ID="btnDisplay" runat="server" OnClick="Display" Text="Display" />
    <br />
    <asp:Label ID="lblname" runat="server"></asp:Label>
    <br />
    <asp:UpdatePanel ID="UpdatePanel1" runat="server">
        <ContentTemplate>
            <asp:Timer ID="Timer1" runat="server" OnTick="RefreshGridView" Interval="1000" />
            <asp:GridView ID="GridView1" runat="server" AutoGenerateColumns="false">
                <Columns>
                    <asp:BoundField DataField="CustomerId" HeaderText="Id" />
                    <asp:BoundField DataField="Name" HeaderText="Name" />
                    <asp:BoundField DataField="Country" HeaderText="Country" />
                </Columns>
            </asp:GridView>
        </ContentTemplate>
    </asp:UpdatePanel>
</div>

C#

protected void Display(object sender, EventArgs e)
{
    //Your other action here i just showing Textbox value to label control
    lblname.Text = txtName.Text;
}

protected void Page_Load(object sender, EventArgs e)
{
    if (!this.IsPostBack)
    {
        BindGridView();
    }
}

private void BindGridView()
{
    using (SqlConnection con = new SqlConnection(ConfigurationManager.ConnectionStrings["ConStr"].ConnectionString))
    {
        using (SqlCommand cmd = new SqlCommand())
        {
            cmd.Connection = con;
            cmd.CommandType = CommandType.Text;
            cmd.CommandText = "SELECT * FROM CustomerTest";
            con.Open();
            GridView1.DataSource = cmd.ExecuteReader();
            GridView1.DataBind();
            con.Close();
        }
    }
}

protected void RefreshGridView(object sender, EventArgs e)
{
    BindGridView();
}

VB.Net

Protected Sub Display(sender As Object, e As EventArgs) Handles Me.Load
	'Your other action here i just showing Textbox value to label control
	lblname.Text = txtName.Text
End Sub

Protected Sub Page_Load(sender As Object, e As EventArgs)
	If Not Me.IsPostBack Then
		BindGridView()
	End If
End Sub

Private Sub BindGridView()
	Using con As New SqlConnection(ConfigurationManager.ConnectionStrings("ConStr").ConnectionString)
		Using cmd As New SqlCommand()
			cmd.Connection = con
			cmd.CommandType = CommandType.Text
			cmd.CommandText = "SELECT * FROM CustomerTest"
			con.Open()
			GridView1.DataSource = cmd.ExecuteReader()
			GridView1.DataBind()
			con.Close()
		End Using
	End Using
End Sub

Protected Sub RefreshGridView(sender As Object, e As EventArgs)
	BindGridView()
End Sub

At same time we executed insert statement in backend to check the OnTick refresh functionality which gets call after Interval period sets in Timer.

SQL

INSERT INTO [CustomerTest]([CustomerId],[Name],[Country])
     VALUES(4,'Robert Schidner','Russia')
GO

Screenshot