London, May 6 (PTI) India and the UK on Tuesday confirmed the completion of a "landmark" multi-billion-pound trade deal, which locks in reductions on 90 per cent of tariff lines and is expected to add 4.8 billion pounds annually to the British economy by 2040.

Prime Ministers Narendra Modi and Keir Starmer are said to have had a “very warm” phone call to agree the Free Trade Agreement (FTA), which will now go through the process of legal text formalisation to be approved by the British Parliament before it comes into force.

"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,” Starmer said in a statement.

The deal was finalised by Commerce and Industry Minister Piyush Goyal during his talks with UK Business and Trade Secretary Jonathan Reynolds in London on Friday.

For the UK, the biggest wins being highlighted are Scotch whisky tariffs set to be halved from 150 to 75 per cent and automotive tariffs set to fall from 100 to 10 per cent under a quota.

According to the UK Department for Business and Trade (DBT), besides whisky and gin, tariff reductions have also been achieved on products such as medical devices, advanced machinery and lamb.

Based on 2022 trade statistics, the department claims this amounts to India cutting tariffs worth over 400 million pounds when the deal comes into force, which will more than double to around 900 million pounds after 10 years.

"By striking a new trade deal with the fastest-growing economy in the world, we are delivering billions for the UK economy and wages every year and unlocking growth in every corner of the country, from advanced manufacturing in the North-East to whisky distilleries in Scotland,” said Reynolds.

“In times of global uncertainty, a pragmatic approach to global trade that provides businesses and consumers with stability is more important than ever,” he said.

The FTA is expected to increase bilateral trade, which stands at 41 billion pounds a year, by an additional 25.5 billion pounds, with UK wages up by 2.2 billion pounds each year in the long run.

"FTAs are notoriously complex, and this truly is a remarkable achievement that will serve both countries well. This agreement represents a significant milestone in UK-India relations, underscoring the potential of our partnership and the opportunities that lie ahead,” said Manoj Ladwa, Founder and Chairman of UK-based policy platform India Global Forum (IGF).

One of India’s key demands around a Double Contributions Convention will ensure that professionals in either country are not forced to pay national insurance or social security contributions in both countries.

On professional visas, the UK stressed that there would be no change to the UK immigration policy except to offer a more streamlined process for business mobility. India has also succeeded in additional categories such as chefs, musicians and Yogis for the UK’s professional visa routes.

India and the UK had restarted negotiations on an FTA this February after a pause in the three-year negotiations for general elections last year.

An accompanying Bilateral Investment Treaty (BIT), which was also being negotiated in parallel, has not gone over the line at this stage, but UK officials indicated that it is hoped that it will conclude soon too. PTI AK ZH ZH ZH

Free Trade Agreement secures large tariff cuts and mobility provisions between India and the UK, pending parliamentary approval. The Free Trade Agreement commits India and the UK to broad tariff liberalisation across key goods sectors with sector-specific market access and quota arrangements, and requires final legal text and domestic approval before coming into force. The package includes a Double Contributions Convention to avoid dual national insurance or social security contributions and streamlined business mobility measures expanding professional visa categories, while an accompanying Bilateral Investment Treaty remains under negotiation.