India's decision to cut import duties on high-capacity motorcycles in the 2025-26 Union Budget is a strong positive gesture to the new US administration under President Donald Trump, signaling enhanced bilateral trade ties.
Specifically, the import duty on motorcycles with engine capacities up to 1,600 cc, imported as completely built-up (CBU) units, has been reduced from 50% to 40%.
Additionally, the import duty on semi-knocked down (SKD) kits has decreased from 25% to 20%, and the tax on completely knocked down (CKD) units has been lowered from 15% to 10%.
The government’s move to cut these tariffs aligns with the broader goal of promoting domestic manufacturing while supporting the import of premium products. The changes are likely to benefit Harley-Davidson, which has been making inroads into the Indian market, as the company’s motorcycles fall within the high-capacity segment. Harley’s smallest motorcycle in India, the 440X, is co-manufactured with Hero MotoCorp, and the tariff reduction is expected to make American motorcycles more affordable to Indian consumers.
In addition to motorcycles, India is reportedly planning to lower customs duties on other high-end products, such as specialized steel and electronic items, further encouraging foreign brands.
The Budget also touches on the luxury car segment, with the government reducing the tariff on high-end cars priced above $40,000 from 125% to 70%, reflecting the growing demand for luxury vehicles in India. The move to cut import duties for high-end motorcycles and cars indicates a shift towards making luxury products more accessible to Indian consumers, while simultaneously fostering domestic production.
Hero MotoCorp, which manufactures Harley-Davidson models in India, has seen impressive growth, with its sales of the Harley-Davidson X440 and Hero Mavrick 440 models surging by 77% year-on-year in the April-December 2024 period. With the new tariffs, the company's sales are likely to receive an additional boost.
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