India and the United Kingdom have finalised a major trade agreement after three years of negotiations, aiming to strengthen bilateral economic ties and expand market access on both sides.

Announced on Tuesday, the UK government said the deal is projected to increase annual bilateral trade by £25.5 billion, add £4.8 billion to the UK’s GDP, and boost wages by £2.2 billion in the long term.

As part of the agreement, India will slash tariffs on 90% of tariff lines, with 85% of those becoming entirely duty-free within a decade. India’s Trade Ministry stated that 99% of Indian exports will now face no import duties entering the UK, calling it a major step toward integrating into global value chains.

“This brings us closer to our goal of becoming a global economic powerhouse,” said India’s Trade Minister Piyush Goyal.

Key UK industries stand to benefit, particularly the alcohol and automotive sectors. Whisky and gin tariffs will be halved to 75%, gradually reducing to 40% over ten years. Tariffs on UK-made cars will drop from over 100% to 10% under a quota system.

Other UK exports set to see tariff cuts include medical devices, cosmetics, aerospace components, lamb, salmon, chocolate, and biscuits.

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