In a historic moment for the India-UK trade and economic ties, Prime Minister Narendra Modi and his British counterpart Keir Starmer on Thursday signed the much-awaited Free Trade Agreement (FTA), which will boost annual bilateral trade by about $34 billion.

As part of the landmark FTA, India will cut tariffs on 90 per cent of the UK products, while the UK will reduce duties on 99 per cent of Indian exports, significantly cutting tariff lines and regulatory processes across sectors.

"Our landmark trade deal with India is a major win for Britain. It will create thousands of British jobs across the UK, unlock new opportunities for businesses and drive growth in every corner of the country," said Starmer in a post on X.

The pact is set to make imported goods like Scotch whisky, gin, luxury cars, cosmetics, and medical devices more affordable for Indian consumers.

With the FTA being materialised, Indian farm products will get tariff parity with major European exporters like Germany. Zero duties on textiles and leather are expected to boost India’s competitiveness among regional peers such as Bangladesh and Cambodia.

India’s leather sector is projected to gain an additional market share of 5 per cent in the UK within the next two years.

Similarly, projections show that electronics and engineering exports are likely to double by 2030, while gems and jewellery exports are likely to double (from the current $941 million) in the next three years.

Officials estimate the deal will increase UK exports to India by almost 60 per cent over the long term.

Earlier, PM Modi called on Starmer at the Chequers Estate - the countryside retreat of the Prime Minister of the United Kingdom - as he began official engagements on his fourth visit to the country.

Prime Minister Modi is set to hold wide-ranging discussions with Starmer on the entire gamut of India-UK bilateral relations and also exchange views on issues of regional and global importance. Later in the day, he will also call on King Charles III.

During the discussions, the two sides will also review the progress of the Comprehensive Strategic Partnership (CSP) with a specific focus on trade and economy, technology and innovation, defence and security, climate, health, education and people-to-people ties.