Prime Minister Narendra Modi government may soon yield to US President Donald Trump's impending demand of lower import tariff on Harley Davidson bikes. The govt may announce the decision during President Trump's two-day maiden visit to India which begins on Monday from Gujarat.
The Indian officials have apparently promised to lower tariffs to 'a single digit' for the bikes with displacement above 1600cc. The proposed decision will cast a new tariff classification for bikes above 1600cc cylinder capacity.
The import duty on all completely built-up(CBU) motorcycles is currently at 50% - which was at 100% earlier and was reduced in 2019 by the govt after Trump-Modi telephonic conversation - but Trump criticized the import duty as still "too high" and "not acceptable". Trump had said, "He (Modi) reduced it by 50 per cent with one phone call. I said it's still unacceptable because it's 50 per cent versus nothing. It's still unacceptable. And they're working on it." While India reduced the custom duty on CBUs it increased the tariffs on Completely Knocked Down(CKD) units from 10% earlier to 15%. The majority of Harley's sales comes from the CKDs, bikes which are assembled in India and have displacement less than 1600cc.
Harley Davidson sold 2,676 motorcycles in India during FY 2019. The company sells 17 Models in India which ranges from ₹5.33 lakh to ₹50.3 lakh.
The cuts will not only boost the Harley Davidson but also American motorcycle brand like Indian Motorcycle, British brands like Triumph.
The boost to Wisconsin headquartered motorcycle giant, through reduction in the import tariffs, is also crucial for Trump electorally, who enjoys a good deal of influence among the Harley Davidson riders.