India and the UK are poised to sign a free trade agreement designed to reduce tariffs and expand market access for both nations. The deal, announced in May after years of negotiations, will see India lower tariffs on British goods such as whisky, gin, and cars, while the UK will increase imports of Indian textiles, gemstones, and other products. Indian Prime Minister Narendra Modi is currently in the UK to finalize the agreement, which is expected to boost the British economy by £4.8 billion annually and bilateral trade by an additional £25.5 billion annually by 2040. Last year, trade between the two countries totaled £42.6 billion.

The agreement, approved by the Indian cabinet, still requires UK parliamentary approval and is expected to take at least a year to come into effect. Prime Minister Modi previously described the deal as a "historic milestone" that would catalyze trade, investment, growth, job creation, and innovation. UK Prime Minister Sir Keir Starmer also lauded the deal as a "landmark" achievement that will create thousands of British jobs. Indian manufacturers will also gain increased access to the UK market for electric and hybrid vehicles.

Impact Statement: The agreement has the potential to significantly boost economic activity and create jobs in both India and the UK, although the full impact may not be felt for at least a year.