Keir Starmer is set to sign off on a trade deal with India today that he hopes will give the struggling UK economy a £4.8billion boost.
The PM and Indian counterpart Narendra Modi will seal a package cutting tariffs on an array of exports – including halving duty on whisky.
But ministers have been forced to deny that the terms will boost immigration, or undercut Brits by giving Indian workers favourable tax terms.
Mr Modi and Sir Keir are meeting at the premier’s country residence to hail the long-awaited agreement.
Tariffs on a basket of goods will be reduced from an average of 15 per cent to 3 per cent, with the aim of boosting the £11billion a year of products sent to the south Asian nation.
Whisky tariffs will be slashed in half, according to the Government, and will fall further over successive years, while other industries including soft drinks, cars and cosmetics are also expected to see cheaper duties.
Keir Starmer and Indian counterpart Narendra Modi will seal a package cutting tariffs on an array of exports – including halving duty on whisky
India will get zero tariffs on 99 per cent of produce classes, covering virtually all its exports to the UK.
That includes clothes and footwear – putting it on a par with countries like Bangladesh and Vietnam. It also covers food products such as frozen prawns.
Delhi has also extracted concessions on mobility for professionals.
Employees due to work in the UK for under three years will pay social taxes in India rather than being subject to national insurance.
But Trade Secretary Jonathan Reynolds told BBC Radio 4’s Today programme: ‘It is completely false to say any British worker is undercut by this deal.’
The UK government assessment said: ‘Nothing in the deal is expected to have a long-term impact on net migration.
‘This trade agreement will not be creating or ringfencing jobs for Indian professionals. Any increased access to temporary work assignments will simply give UK businesses a greater pool of global talent to pull from.’
The government says the trade deal will be the largest of its kind for economic impact on Britain.
Sir Keir and Mr Modi are also poised to ramp up joint efforts to tackle illegal migration and organised crime.
Ahead of the meeting, Sir Keir said: ‘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, delivering on our Plan for Change.
‘We’re putting more money in the pockets of hardworking Brits and helping families with the cost of living, and we’re determined to go further and faster to grow the economy and raise living standards across the UK.’
The deal is expected to result in 2,200 jobs across the country and £6billion investment by British and Indian businesses.
Mr Reynolds said the investment will ‘reach all regions and nations of the UK so working people in every community can feel the benefits’.
He added: ‘The almost £6billion in new investment and export wins announced today will deliver thousands of jobs and shows the strength of our partnership with India as we ensure the UK is the best place in the world to invest and do business.’
The UK and India are also bolstering co-operation on tackling corruption, fraud, organised crime and illegal migration, by sharing criminal records and other intelligence.
The deal has not given the UK as much access as it would have liked to India’s financial and legal services industries.
The agreement promises some benefits for the UK’s financial services, with Chancellor Rachel Reeves understood to have pushed on behalf of the sector in discussions with her Indian counterpart.
But more wide-ranging access was not agreed, and talks continue on a bilateral investment treaty aimed at protecting British investments in India and vice versa.
The two nations also continue to discuss UK plans for a tax on high-carbon industries, which India believes could hit its imports unfairly.
Negotiations on the deal began when Boris Johnson was prime minister in 2022, and were concluded in May this year.
Trade Secretary Jonathan Reynolds told BBC Radio 4’s Today programme: ‘It is completely false to say any British worker is undercut by this deal.’
Shadow business secretary Andrew Griffith said it had only been made possible ‘because of Brexit delivered by the Conservatives’.
He added: ‘Any trade deal that can successfully cut regulation which stops Britain’s makers from creating new jobs and wealth will be a step in the right direction.
‘But the irony should not be lost on anyone that any gains from this trade deal will be blown out of the water by (Deputy Prime Minister) Angela Rayner’s union charter, stifling business with red tape, the jobs tax and, come autumn, Rachel Reeves’ inevitable tax hikes that will punish Britain’s makers just to reward those who do not contribute.’
The Confederation of British Industry (CBI) has said that the signing ‘sends a powerful signal that the UK is open for business and remains resolute in its commitment to free and fair trade’.
Chief executive Rain Newton-Smith added: ‘A trade agreement with India – one of the world’s fastest-growing economies – is a springboard for long-term partnership and prosperity. UK firms can take advantage of this new platform to scale, diversify and compete on the global stage.’
Sir Keir is facing calls to raise the case of Jagtar Singh Johal, a British citizen who has been detained in India since 2017, when the Prime Minister meets Mr Modi.
The Scottish Sikh is accused of being a member of the Khalistan Liberation Force, which is banned as a terror group in India.
His family say he is being arbitrarily detained, with his brother Gurpreet Singh Johal insisting the matter should be ‘high on the agenda when the prime ministers meet’.
