Prime Minister Narendra Modi and US President Donald Trump have asked for legal vetting of a limited trade deal (Photo: Pradeep Gaur/Mint)
Prime Minister Narendra Modi and US President Donald Trump have asked for legal vetting of a limited trade deal (Photo: Pradeep Gaur/Mint)

Donald Trump hops on his Harley hobby horse, calls for tariff cut

  • Due to modest demand for its products in India, Harley is yet to establish a full-fledged manufacturing operation in India
  • Trump on Tuesday cited the iconic American motorcycles once again as he took his complaints to India

India-US trade could roar, just like Harley-Davidson bikes. The problem, according to President Donald Trump, is high Indian tariffs.

Trump on Tuesday cited the iconic American motorcycles once again as he took his complaints to India.

“When Harley-Davidson sends its motorcycles, they have to pay high taxes. It’s not fair for any company to be paying 100% tax. When Indian companies send their motorcycles they don’t have to pay anything in the US. It has to be reciprocal," Trump told reporters.

“US has to be treated fairly. We have a tremendous deficit with India of $30 billion which has now come down to $25 billion." Imports of premium motorcycles in India, in a complete built form, used to attract as much as 100% import duty, but this was later cut to 50% under US pressure.

Many global automakers like Hyundai Motor Co., Ford Motor Co., Nissan Motor Co. and Renault SA use India as a hub for exports because of low costs.

Harley-Davidson, in its quest to conquer markets like China and India, has been scouring for local partners to manufacture its products. The American company has also held talks with Hero MotoCorp, India’s largest two-wheeler manufacturer, for a possible collaboration, according to industry executives.

Due to modest demand for its products in India, Harley is yet to establish a full-fledged manufacturing operation in India. The company has a production and assembly plant in Bawal, Haryana where it can assemble about 1,000 units per month.

Harley-Davidson’s market share stands at 10% in premium motorcycles with engines bigger than 500cc. The company’s cumulative sales for the April-January period during the current fiscal stands at 2,252 units whereas the market size in this size of bikes was 21,694 units for the same period.

With a presence in the 500cc- 800cc motorcycle category, Royal Enfield dominates with 17,096 units during the period, according to the Siam data.

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