The UK is set to receive nearly £6bn in new investment and export wins as Indian companies expand operations and British firms secure major business in India.
The landmark UK-India trade deal is expected to create more than 2,200 jobs in sectors like aerospace, tech and advanced manufacturing.
Prime Minister Sir Keir Starmer said after meeting Indian PM Narendra Modi: “The best days in this job are when months of hard work come to fruition and we land a big win for British people.
“Today is one of those days: we’ve signed a new trade deal with India which will create new British jobs, boost growth and wages in the UK by billions.
“It’s a win for British businesses – slashing tariffs and boosting exports in every sector from whisky to cosmetics.
“It’s also a huge win for British shoppers – bringing down prices and creating a greater choice of Indian products here in the UK.
“Our deal will deliver benefits for the long-term by growing the UK economy by around £4.8bn every year and boosting wages for working people by £2.2bn.
“More growth means more money in people’s pockets, more money for our public services that we all depend on, and more money to build a better future for our children.
“Every day in this job as Prime Minister, I go out to bat for the working people of Britain.
“My relentless focus is on improving people’s lives, raising living standards and getting more money into people’s pockets.
“That is what today’s deal will help to deliver.”
India’s average tariff on UK goods will fall from 15 per cent to 3 per cent, in an attempt to make it easier for UK exporters of everything from cosmetics and soft drinks to cars and medical devices.
Business and Trade Secretary, Jonathan Reynolds, added: “The billions brought to our economy from the trade deal signed today will reach all regions and nations of the UK so working people in every community can feel the benefits.
“The almost £6bn in new investment and export wins announced today will deliver thousands of jobs and shows the strength of our partnership with India as we ensure the UK is the best place in the world to invest and do business.
“This government is proving time and again that we can deliver on our mission to grow the economy, put more money in pockets and boost living standards under our Plan for Change.”
As part of the wider agreement, the UK and India will deepen collaboration in defence, education, climate, technology and innovation.
The two countries have also committed to strengthening joint efforts to combat corruption, fraud, organised crime and irregular migration, with plans to finalise a new criminal records sharing agreement.
The deal is expected to significantly boost trade: UK exports to India could rise nearly 60 per cent in the long run – an estimated £15.7bn by 2040 – while overall bilateral trade could grow by almost 39 per cent, reaching £25.5bn a year.
Sectors set to benefit include clean energy, manufacturing and financial services.
Tariffs will be cut on aerospace parts (from 11 per cent to 0 per cent), automotives (from up to 110 per cent to 10 per cent under a quota), and electrical machinery (up to 22 per cent cut in half or eliminated entirely).
UK businesses in renewables and financial services will also get better access to India’s growing markets and procurement systems.
Several British companies have already announced deals in India, with Airbus and Rolls-Royce delivering aircraft – many powered by UK-made engines – as part of contracts worth around £5 bn, supporting jobs in Filton, Broughton and Derby.
Meanwhile, AI-powered energy firm Zerowatt Energy will open a new global HQ in Leicester, investing £10m and creating 50 jobs across Leicester, Manchester, Edinburgh and London over the next three years.