India and the United Kingdom on Thursday signed a Comprehensive Economic Trade Agreement.

The free trade agreement was signed by Commerce Minister Piyush Goyal and his British counterpart Jonanthan Reynolds during Prime Minister Narendra Modi’s visit to the United Kingdom.

“Today marks a historic day in our bilateral relations,” Modi said in a press statement beside UK Prime Minister Keir Starmer after the signing. He said that the agreement aimed to benefit Indian farmers, the micro, small and medium enterprises sector, footwear and jewellery exports, as well as the seafood and engineering goods sectors.

Modi also said that British medical devices and aerospace parts would be more easily sold in India.

Starmer, on his part, said that the trade deal would help British workers in cutting-edge manufacturing, and would also benefit whiskey distillers across Scotland and the service sector in London, Manchester and Leeds.

The UK prime minister said that the agreement was “the biggest and most economically significant” trade deal the United Kingdom has made since Brexit – when Britain exited the European Union in 2016.

The UK government said that the trade deal was set to increase bilateral trade between the two countries by nearly 39% in the long run, The Indian Express reported.

This would be equivalent to $34  billion a year compared with the projected 2040 levels of trade in the absence of an agreement, currently at $21 billion annually.

In his statement, Modi also thanked Starmer for his support after the Pahalgam terror attack. “We are united in the belief that there is no place for double standards in the fight against terrorism,” the Indian prime minister said.

The terror attack at Baisaran near Pahalgam town in Jammu and Kashmir on April 22 left 26 persons dead and 16 injured. The terrorists targeted tourists after asking their names to ascertain their religion, the police said. All but three of those killed were Hindu.

“We also agree that the forces which espouse extremist ideologies should not be allowed to misuse democratic freedoms,” Modi added. “Those who misuse democratic freedoms to undermine democracy itself must be held to account.”

The Indian prime minister also said that “today’s era demands development, not expansionism”.

New Delhi and Britain had announced the free trade agreement in May after more than three years and 14 rounds of negotiations. With the agreement, India opens its doors to high-end British cars and whisky in a phased manner.

The agreement ensures comprehensive market access for goods across all sectors, covering all of India’s export interests, The Indian Express reported. India’s Commerce and Industry Ministry had earlier said that the country would benefit from tariff elimination on approximately 99% of tariff lines, covering nearly 100% of trade value.

Also read: Why the trade deal with India is a strategic win for the UK