LONDON — Britain and India agreed to a trade deal Tuesday, strengthening economic ties between two of the world’s largest economies amid President Donald Trump’s upheaval of the global trade system.

The deal, which the British government said would increase bilateral trade by 25.5 billion pounds ($34 billion), comes three years after the negotiations began. Intense talks to finalize the outstanding issues took place last week between Jonathan Reynolds, Britain’s business and trade secretary, and Piyush Goyal, India’s commerce minister.

The British government said India had reduced 90% of tariffs on goods, and most of those would become tariff-free within a decade. Duties on British whiskey and gin would be halved, to 75%, and eventually be lowered to 40%. India will also reduce its car tariffs, which exceed 100%, to 10% under a quota. Britain, in turn, reduced tariffs on clothes, footwear and food products, including frozen prawns.

Last year, trade in goods and services between India, the world’s fifth largest economy, and Britain, the world’s sixth, totaled 42.6 billion pounds, according to British data.

The trade agreement comes as many countries are seeking to bolster alliances after Trump sent shock waves through the global economy by announcing, and then pausing, high tariffs on dozens of countries. The policy whiplash has created uncertainty that is expected to dampen investment and economic growth around the world.

Britain squeezed out 0.1% economic growth in the final quarter of last year, and officials there have tried to increase investment from foreign companies and sign more trade deals. Other negotiations, including those with South Korea, are continuing.

“We are now in a new era for trade and the economy,” British Prime Minister Keir Starmer said Tuesday. “That means going further and faster to strengthen the U.K.’s economy,” he said, adding that meant forming closer alliances and reducing trade barriers.

But with immigration a hot-button issue in British politics, the leader of the opposition Conservative Party, Kemi Badenoch, criticized a part of the deal that would make it cheaper for Indian companies to employ people in Britain.

Since 2020, when Britain formally left the European Union, its largest trading partner, the nation has tried to strike trade deals farther afield. A deal with India had proved elusive, despite promises by former British prime ministers including Boris Johnson who, in 2022, said he was aiming to achieve such an agreement by Diwali in late October that year. But the negotiations were stuck on several key issues, including India’s request for more visas for its citizens in Britain. The stalled negotiations were restarted by the Labour Party government in February.

Indian Prime Minister Narendra Modi took to social media to call the deal “ambitious and mutually beneficial.” It will “catalyze trade, investment, growth, job creation and innovation in both our economies,” he wrote, adding that he looks forward to hosting Starmer soon.

Since these negotiations began, India, once regarded as the crown jewel in the British Empire, overtook Britain in terms of economic growth.

The trade deal was not the ambitious “bells and whistles” agreement that the British government was once seeking, said David Henig, a trade expert in London. But “it’s all about taking the moment,” Henig said, adding that parts of the deal could expand and get deeper when it is put in place.

The announcement provides some good news for Starmer after a big setback for his governing Labour Party in regional and mayoral elections last week.

Mark Kent, CEO of the Scotch Whisky Association, said the reduction in tariffs was “transformational” in giving producers of Scotland-made whisky access to the world’s largest whiskey market. It has the potential to increase exports by 1 billion pounds over the next five years.

Beyond India, there is a potentially greater economic prize for Britain from new trade agreements with the EU and the United States.

Progress on an EU deal is expected later this month at a summit in Britain. However, the extent to which a deal will ease the trade friction introduced by Brexit is unclear.

The EU is Britain’s biggest and geographically closest trade partner, and the United States is the most important individual nation for trade flows. So far, Britain has not achieved exemptions from U.S. tariffs — including on its cars — and Trump’s latest threat to target movies made outside the United States has caused alarm in the British film industry.

For Modi, the deal with Britain was welcome news during a trying time. His government is trying to formulate a response to a terrorist attack in the disputed region of Kashmir on April 22 that killed 26 civilians. Some kind of military action is anticipated in Pakistan, which India has blamed for the attack.

The trade agreement with Britain is only one of several that India has been struggling to strike. An off-and-on negotiation with the EU is supposed to conclude later this year, after about 12 years in the making.

A deal with the United States is also expected to be completed this year.