In a big gesture ahead of Prime Minister Narendra Modi's scheduled visit to the US, India has reduced basic customs duty on foreign motorcycles, including Harley-Davidson motorcycles. The gesture, made in the Union Budget 2025, is a bid to reduce trade tensions with America.
For motorcycles with an engine capacity of up to 1600 cc, customs duty on Completely Built-Up (CBU) units has been reduced from 50 per cent to 40 per cent. For motorcycles above 1600 cc, the reduction is even steeper.
Other vehicle import duties changed
While the government has also reduced customs duty on imported cars and other motor vehicles, it is not yet certain if their effective duty rates will see dramatic changes.
Trump pressure on Indian tariffs
Harley-Davidson motorbikes have been a thorn in the side of India and the US for long, with President Donald Trump repeatedly criticising India's import tariffs. Despite having cordial diplomatic ties with PM Modi, Trump had been repeatedly terming India as a "tariff king" and demanding more cuts.
In an interview to CBS News, President Trump reiterated his stand, saying, "You look at India, a very good friend of mine, Prime Minister (Narendra) Modi… They have a 100 per cent tax on a motorcycle. We charge them nothing."
Trump also claimed that after he personally made PM Modi take cognisance of the issue, India reduced the tariff to 50 per cent. But he claimed the new duty was still not fair and demanded further cuts.
India’s previous tariff cuts
India had previously lowered the import duty on motorcycles to 50 per cent from 50 per cent a half year ago in February last year. The government appears to be signaling that it is willing to negotiate trade complaints raised by the US, particularly before senior-level diplomatic talks.
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