India and Britain are set to sign a major free trade deal to cut tariffs on goods and increase market access for the two countries.
India will lower tariffs on British goods, including whisky, gin and other drinks as well as cars. The UK, in turn, will import more of India’s textiles, gemstones and other goods.
Indian Prime Minister Narendra Modi is in the UK to sign the deal. He will also hold talks with Prime Minister Sir Keir Starmer and meet King Charles during his brief stay.
The UK government says the deal – announced in May after years of negotiations – will boost the British economy by £4.8bn a year. It comes after nearly three years of negotiations.
Negotiations on the deal concluded in May and the pact is expected to boost bilateral trade by an additional £25.5bn a year by 2040. Last year, trade between the UK and India totalled £42.6bn.
But it might take at least a year for the deal to come into effect after it is approved by the UK parliament. The deal was okayed by the Indian cabinet earlier this week, news agency PTI reported on Tuesday.
In May, Modi said the deal was a historic milestone that was “ambitious and mutually beneficial”.
The pact would help “catalyse trade, investment, growth, job creation, and innovation in both our economies”, he said in a post on social media platform X.
It’s his fourth visit to the UK since becoming India’s prime minister in 2014.
On Wednesday, Sir Keir called the “landmark” deal a major win for Britain.
“It will create thousands of British jobs across the UK, unlock new opportunities for businesses and drive growth,” he said.
Indian manufacturers are also expected to gain access to the UK market for electric and hybrid vehicles.
The two leaders are also expected to discuss last month’s crash of an Air India jet in which 260 people died when a London-bound flight crashed in Ahmedabad in Gujarat in western India.