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Sir Keir Starmer told Indian counterpart Narendra Modi the signing of a trade deal was a “historic day” for the two countries.

At the Prime Minister’s country residence Chequers, Sir Keir said the deal marked a “step change” in relations.

Mr Modi said they were “writing a new chapter” in the UK and India’s shared history.

The deal is set to be worth £6 billion in investment for the British economy and the two leaders have also agreed to increase efforts to tackle illegal migration and organised crime.

Sir Keir said: “I’m really pleased and privileged to welcome you here today on what I consider to be a historic day for both of our countries, and the delivery of the commitment that we made to each other.”

Mr Modi, speaking via a translator, described the UK and India as “natural partners”.

Business Secretary Jonathan Reynolds and his Indian counterpart Piyush Goyal then formally signed the trade agreement in the great hall of Chequers.

The UK-India trade deal is understood to be the largest of its kind for its economic impact on Britain.

It will see tariffs on an array of British goods reduced from an average of 15% to 3%, with the aim of boosting the £11 billion of imports into the south Asian nation.

Whisky tariffs will be slashed in half and will fall further over successive years, while other industries including soft drinks, cars and cosmetics are also expected to see cheaper duties.

The deal is expected to result in 2,200 jobs across the country and £6 billion investment by British and Indian businesses.

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.

But 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.

Shadow business secretary Andrew Griffith said it had only been made possible “because of Brexit delivered by the Conservatives”.

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.”