India is reportedly considering a bold economic move—eliminating import tariffs on high-end motorcycles such as Harley-Davidson. This potential shift, currently under negotiation, is viewed as a strategic sweetener in India’s broader trade dialogue with the United States, as reported by Bloomberg.
If implemented, it would mark a significant departure from India’s traditionally protectionist approach to imported automobiles, especially in the luxury segment.
Earlier this year, India signalled its intent to liberalise imports of premium motorcycles through the Union Budget. Duties on bikes with engine capacities above 1,600cc were cut from 50% to 30%, while both semi-knockdown (SKD) and completely knocked down (CKD) units were also offered relief.
The latest development—complete tariff elimination—is a further step in that direction, with potential to reshape the premium two-wheeler market.
Harley-Davidson exited direct operations in India in 2020 and now operates under a licensing agreement with Hero MotoCorp. Despite the brand’s global appeal, high import duties had previously priced its motorcycles out of reach for many Indian buyers.
Should the tariffs be scrapped, Harley-Davidson may gain the flexibility to relaunch a broader range of models, reduce prices significantly, and scale its dealership network. Price reductions in the range of 20–30% could follow, depending on the model and import route.
This proposed zero-duty structure appears to be more than just a domestic policy move. It is also a diplomatic signal to the United States, especially relevant under the renewed leadership of Donald Trump, who has previously criticised India’s “unacceptable” tariffs on American motorcycles.
By easing this sticking point, India could open the door to smoother trade negotiations across sectors.
Read More: India and US Finalise Terms of Reference to Address Trade Tariff Barriers
It’s important to note that even with zero import duty, final retail prices may still be affected by other levies. Goods and Services Tax (GST), along with the Agriculture Infrastructure and Development Cess (AIDC), will continue to apply.
Moreover, logistical challenges like after-sales support, spare parts availability, and expanding the dealership network remain critical for any long-term success in the Indian market.
This move, if finalised, reflects a deeper transformation in India’s trade policy. It shows a willingness to adapt, collaborate, and open up niche markets in pursuit of larger economic and diplomatic gains.
For brands like Harley-Davidson, the road back into India could soon become far more accessible, but success will depend on more than just pricing. Delivering value through experience, reliability, and service will be key.
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Published on: Apr 23, 2025, 2:33 PM IST
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