The India-UK Free Trade Agreement (FTA) will significantly improve market access and increase bilateral trade by approximately $34 billion per year, the British government said on Thursday, just hours before the landmark agreement was formalized.

The FTA, billed as the UK's most economically significant bilateral trade agreement since leaving the European Union, will be signed in the presence of Prime Minister Narendra Modi and his British counterpart Keir Starmer.

Key Highlights

• Modi and Starmer to sign landmark India–UK FTA, expected to boost bilateral trade by $34 billion.
• Deal removes tariffs on 99% of Indian exports and cuts whisky, car duties in India significantly. 

The two prime ministers will also announce a "UK-India Vision 2035" to propel their partnership to new heights in an era of rapid global change.

The UK stated that Indian consumers will benefit from improved access to the best British products, ranging from soft drinks and cosmetics to cars and medical devices, as average tariffs will fall from 15% to 3% after the FTA takes effect.

The UK already imports 11 billion pounds in goods from India, but liberalised tariffs on Indian goods will make it easier and cheaper for British consumers and businesses to buy Indian products while also increasing Indian businesses' exports to the UK, according to a statement.

"Our landmark trade agreement with India is a significant victory for Britain," Starmer said.

"It will create thousands of British jobs across the UK, open up new opportunities for businesses, and drive growth in every part of the country, delivering on our Plan for Change," he said.

Also Read: PM Modi Reaches London: Talks on Historic India-UK Trade Agreement

The UK stated that the ambitious new vision for 2035 will go beyond trade, with renewed mutual commitment to drive prosperity, innovate, and deepen defence cooperation via a new Defence Industrial roadmap.

It will secure "our borders, tackle climate change, and nurture educational connections." On the FTA, the UK stated that it is expected to increase bilateral trade by 25.5 billion pounds (USD 34 billion) annually.

It is India's most comprehensive deal to date, as well as the UK's most economically significant bilateral trade agreement since leaving the EU, the UK stated. "It significantly improves market access for businesses in both countries, leading to lower-cost products and services for consumers," it stated.

PM Modi arrived in London on Wednesday as part of a two-nation visit to the UK and the Maldives.