India To Hike Import Duty On US-Made Motorcycles

India has proposed to raise import duty on several products, in what is seen as a response to the trade stand-off between India and the US. India considers America's policies 'protectionist' that range from tighter visa norms for Indians and higher import duties, particularly on certain steel and aluminium products. Now, India is proposing an additional 50 per cent on products such as imported motorcycles over 800 cc, and this will likely affect prices of certain motorcycle models from Harley-Davidson and Indian Motorcycle, which are imported as completely built units (CBUs) into India.

India has now written to the World Trade Organisation notifying its decision to increase import tariffs on as many as 30 items from the US, amounting to $240 million, in retaliation against tariffs imposed by the US on aluminium and steel imports. The higher tariffs will range from as low as 10 per cent to 50 per cent for US-made motorcycles, and will affect all US-made motorcycles above 800 cc which are imported to India.

The biggest-selling Harley-Davidson bikes in India are the made-in-India Street 750 and Street Rod

Although the brand which is talked about more in this trade stand-off between India and the US, is Harley-Davidson. In fact, US President Donald Trumph had demanded a reduction in import tariff on the American motorcycle brand. But the high tariffs are more likely to affect Polaris-owned Indian Motorcycle which imports all of its products into India, without any local manufacturing or assembly here in India.

But the hike in import duty is unlikely to have any real impact on Harley-Davidson India's sales in India. In all, Harley-Davidson sells 16 models in India, and more than 50 per cent of the company's sales in India are from the made-in-India Street 750 and Street Rod models. The next models in volumes are the ones which are locally assembled in India - including the Harley-Davidson Softail and Harley-Davidson Sportster range. As things stand right now, the hike in import duty will only affect four models in Harley-Davidson India's line-up which include the Harley-Davidson Road King, Harley-Davidson Street Glide Special, Road Glide Special and Harley-Davidson CVO Limited. Prices of these CBU models start at around Rs. 25 lakh, going up to Rs. 50 lakh, and they make only a small fraction of Harley-Davidson India's sales.

So far, things aren't clear how exactly the hike in tariffs will affect prices of US-made motorcycles which are CBUs. But it's clear that all Indian Motorcycle models, as well as the CBU models from Harley-Davidson will see some price revision, with these motorcycles becoming more expensive.