
Following the Union Budget 2025 announcements by Finance Minister Nirmala Sitharaman, India has moved to reduce import duties on high-end motorcycles and luxury cars. This shift is seen as a significant boost for American motorcycle brand Harley-Davidson, especially as it aligns with the long-standing demands of US President Donald Trump, who has been vocal about lowering trade barriers on US-made products.
Good News for Bike Enthusiasts
Bike lovers across India can now look forward to more affordable Harley-Davidson motorcycles as the import duties on high-engine capacity bikes have been reduced. The move, expected to lower the overall price of these iconic motorcycles, is set to make them more accessible to a wider audience.
The import duty on motorcycles with engine capacities up to 1,600 cc, which are imported as completely built-up (CBU) units, has been slashed from 50% to 40%. For larger bikes exceeding 1,600 cc, the reduction is even greater.
Moreover, the duties on semi-knocked down (SKD) kits have been reduced from 25% to 20%, and the tax on completely knocked down (CKD) units is now 10%, down from 15%.
This tariff reduction is expected to have a major impact on Harley-Davidson, which is known for its high-powered bikes. The lower taxes are likely to drive up sales, expanding the brand’s market share in India.
A Long-Standing Issue Between India and the US
The import duties on Harley-Davidson motorcycles have been a point of tension between India and the United States for years. US President Donald Trump repeatedly advocated for lowering these tariffs, calling India's high taxes on foreign-made motorcycles unfair.
Trump, during his tenure, was vocal about what he perceived as trade imbalances between the US and other countries. He had previously argued that India imposed the highest tariffs on foreign goods among major economies, particularly targeting the 100% tariff on US-made motorcycles, including Harley-Davidson.
In an interview with CBS News, Trump commented, "When Harley sends over there, they have 100% tax. When they (India) send in, they make a tremendous number of motorcycles when they send them in, no tax. I called him. I said it’s unacceptable."
The US President had even warned that reciprocal tariffs would be imposed on countries like India if they continued to levy high taxes on American goods. His administration had adopted an "America First" policy, pushing for a reduction in trade barriers and advocating for fairness in global trade relations.
The Impact on India-US Trade Relations
India’s decision to reduce these tariffs comes amid Trump’s strong push for reciprocal tax policies. India, in response to the pressure, has taken steps to ease the tensions, not just over Harley-Davidson but also in broader trade relations. As the largest trading partner of the US in the last financial year, according to data from the Ministry of Commerce, India’s move could pave the way for more cooperative trade relations with the US in the future.
This decision also fits within India's broader economic strategy to lower tariff barriers, particularly in sectors where the country has a strong domestic supply chain.
What Does This Mean for Harley-Davidson in India?
With the reduction in import duties, Harley-Davidson motorcycles are expected to become more affordable to Indian consumers. This move is likely to fuel the brand’s sales and market penetration in a rapidly growing automotive market, especially among India’s affluent and aspirational consumer base.
However, the tax rationalisation still comes with some complexities. The introduction of the Agriculture Infrastructure and Development Cess (AIDC) on imports of such vehicles could impact the effective duty rates, though it’s unclear exactly how this will influence the final pricing.
In conclusion, the Indian government’s decision to reduce tariffs on high-end motorcycles such as Harley-Davidson’s marks a significant shift in trade policy. While this may be seen as a win for consumers and for Harley-Davidson, it also reflects the broader geopolitical dynamics of trade relations under Trump’s "America First" approach. Whether this move will lead to a broader opening of India’s market to US products remains to be seen, but for now, it signals a welcome reduction in the cost of owning a Harley in India.