The Indian government is considering eliminating import duties on high-end motorcycles with engine capacities of 750cc and above, in a bid to ease market access for iconic American brands like Harley-Davidson. This move is part of a broader strategy to strike a trade deal with the US without compromising India’s protectionist stance. The proposal aims to build on earlier concessions that reduced duties on motorcycles up to 1600cc from 50% to 40%. If implemented, this policy shift could make Harley-Davidson motorcycles more affordable for Indian consumers, who have long been deterred by high prices due to import duties.
The Indian government believes that the impact on domestic manufacturers will be minimal, as high-capacity motorcycles account for a small slice of the country’s nearly 16 million annual motorcycle sales. Additionally, India is open to a reciprocal zero-tariff arrangement for auto parts, a sector where it sees strong export potential and limited domestic opposition. This comes as US Vice President JD Vance visits India, highlighting the country’s strategic significance in ongoing trade talks.
The tariff concession is also seen as an attempt to ease tensions and avoid 26% retaliatory tariffs imposed by the US, which are currently paused for 90 days. However, it may not be enough to prevent the US from pressing India to open up tightly protected sectors like e-commerce, electric vehicles, and agriculture as part of any broader trade agreement. The Indian government’s trade and heavy industries ministries have declined to comment on the tariff discussions, but the move is expected to have a significant impact on the Indian automotive market.
The elimination of import duties on high-end motorcycles could lead to an increase in sales for brands like Harley-Davidson, which have struggled to gain traction in the Indian market due to high prices. This could also lead to increased competition in the Indian automotive market, with other foreign brands potentially entering the market or expanding their product offerings. Overall, the proposal to eliminate import duties on high-end motorcycles is a significant development in the Indian automotive market, and its impact will be closely watched by industry stakeholders and consumers alike.