UK finally agrees £4.8bn trade deal with India after three years of talks

Britain and India have agreed a trade deal that ministers say will cut tariffs and add £4.8bn a year to the UK economy by 2040.

- Eleni Courea Kiran Stacey

The agreement, finalised yesterday after more than three years of talks under successive governments, has long been touted as one of the biggest prizes of Brexit.

Keir Starmer said after a call with the Indian prime minister, Narendra Modi, that the "landmark deal" would "grow the economy and deliver for British people and business".

It promises a boost for the UK's car and alcohol industries, which have suffered from the impact of Donald Trump's tariffs in the US.

However, it has sparked a row over a three-year national insurance exemption for Indian workers who have been seconded to the UK and for their employers. Kemi Badenoch, the Conservative leader, said it amounted to "two-tier taxes".

The decision has also been criticised privately by some Labour MPs, given that national insurance contributions for UK employers have just been raised.

The agreement, which is reciprocal and will apply to British workers seconded to India by companies with offices in both countries, was one of Delhi's key demands and a major sticking point until last week. The Indian government described it as a "huge win" and "an unprecedented achievement" for its side.