The UK and India have agreed to a trade deal that will make it easier for British companies to export whiskey, cars and other products and reduce taxes on Indian clothing and footwear exports.

The UK government said the "landmark" agreement took three years to reach, but did not include any changes in immigration policies, including Indian students studying in the UK.

Prime Minister Sir Kyle Stemmer said the deal would boost the economy and "serve the British people and business".

Last year, trade between the UK and India totaled £42.6 billion, which is already expected to grow, but the government said the deal would increase the deal by £25.5 billion a year by 2040.

Prime Minister Narendra Modi described the agreement as a historic milestone, "ambitious and mutually beneficial".

In an article on social media platform X, he said the agreement will help “catalyze trade, investment, growth, job creation and innovation in our two economies.”

The Ministry of Commerce and Trade said that once it takes effect, it could take a year and UK consumers could benefit from the reduction in tariffs on Indian goods entering the country.

These include lower tariffs:

• Clothes and footwear
• car
• Food including frozen prawns
• Jewelry and gemstones

The government also highlighted the benefits of British companies expanding their exports to India's economic growth and job creation.

UK exports that collect taxes include:

• Gin and whiskey
• Aerospace, electrical and medical equipment
• cosmetic
• Lamb, salmon, chocolate and cookies
• Higher value cars

The UK government said the deal was the "largest and most important" bilateral trade agreement signed by the UK since leaving the EU in 2020.

Commerce Secretary Jonathan Reynolds said the benefits of British businesses and consumers are "huge".

The key points in previous negotiations will reduce tariffs on gin and whiskey to 75%, while the price will be further reduced in the following years.

The 100% tariff on British-made cars exported to India will be reduced to 10%, but the total will be limited.

The deal also includes provisions regarding service departments and procurement, allowing UK companies to compete for more contracts.

Under the terms of the deal, some Indian and British workers will also be awarded from a three-year exemption From social security payments, the Indian government calls this an “unprecedented achievement”.

The exemption applies to workers of Indian companies temporarily transferred to the UK and workers of British companies transferred to India. Social Security donations can only be paid by their home country’s employers and employees, not in two places.

The government said the UK has reached a similar "double donation convention" agreement with 17 other countries, including the EU, the United States and South Korea.

But opposition leader Kemi Badenoch described the deal as "a two-tier tax for Kyle", with Labor's increase in donations from employer NI last month, which came into effect on the budget.

"Every time the labor negotiations, Britain loses", said Shadow Commerce Minister Andrew Griffith.

Daisy Cooper, deputy leader of the Liberal Democratic Party, said “It’s very worried that companies may not have to pay taxes to those workers when they hear about Indian workers coming here” and called for MPs to allow voting on the deal.

The government said the national insurance exemption would not affect NHS funding, as Indians working in the UK still need to pay immigration health surcharges.

India is currently the fifth largest economy in the world and is expected to become the third largest in a few years, making it the ideal trading partner for the UK and currently the sixth largest economy in the world.

The UK is also a high-priority trading partner of Prime Minister Modi's government, and its ambitious goal is to increase exports by $1 trillion by 2030.

The deal was a free trade victory in a full-scale tariff campaign by U.S. President Donald Trump, which puts the idea on defensiveness and concerns about the tit trade trade war.

It seems to increase the impetus for this trade deal.

CBI Business Hall Group CEO Rain Newton-Smith welcomed the deal, saying it provided a "beacon of hope" in the ghost of protectionism following Trump's tariff wave.

She added that British businesses have seen “numerous” opportunities in the Indian market.

Allie Renison of communications firm SEC Newgate and a former government trade adviser said the deal could “change” due to the relatively high level of India’s size, growth rate and existing barriers to entry into its market.