India and the UK have signed a free trade agreement, which also includes investment and employment measures.
Prime Minister Narendra Modi confirmed the deal’s conclusion in a social media post on Tuesday, saying it would "deepen our comprehensive strategic partnership, catalyse trade, investment, growth, job creation, and innovation".
The agreement, finalised after more than three years of negotiations, includes a social security pact aimed at streamlining benefits for workers in both countries.
India, the world’s fifth-largest economy after overtaking sixth-placed UK in 2022, will remove tariffs on 90% of UK imports, of which 85% will be tariff-free within ten years. Whisky and gin duties will fall from 150% to 75%, then reduce to 40% by year ten. Automotive tariffs will decline from over 100% to 10% under a quota.
Other items with reduced tariffs include clothing, cosmetics, aerospace products, lamb, and various food and drink items. Downing Street said the deal is forecast to add £25.5 billion to bilateral trade, with the tariff cuts worth £400 million.
An increase in UK GDP of £4.8 billion is also estimated.
"We are now in a new era for trade and the economy," Keir Starmer said. "Today we have agreed a landmark deal with India — one of the fastest growing economies in the world, which will grow the economy and deliver for British people and business."
The new era "means going further and faster to strengthen the UK's economy," he added.
India will remove tariffs on items such as medical devices, aeroplane parts and electrical machinery, cosmetics, soft drinks, lamb, chocolate and biscuits.
The UK, meanwhile, will cut tariffs on clothes, footwear and food products from India.
Under the deal for workers, an agreement under the double contribution convention will allow Indian workers temporarily living in the UK to avoid paying national insurance contributions for three years, with the same applying for British workers in India.
This does not mean Indian workers no longer pay National Insurance if they're working in the UK and will be cheaper than UK workers, but means that workers from Indian companies temporarily transferred to work in the UK will only pay National Insurance contributions in India and vice versa for workers from UK companies.
The UK has arrangements that avoid such "double contributions" with more than 50 countries.