In the Union Budget of 2025, India made a significant move by reducing import duties on high-capacity motorcycles, which includes American brands like Harley-Davidson. This move comes after years of tension between India and the United States over the tariff rates on motorcycles, a situation that has been a sore point for U.S. President Donald Trump.
The key changes include a reduction in the import duty on completely built-up (CBU) motorcycles. For bikes with engine capacities up to 1,600 cc, the duty has been reduced from 50% to 40%. Even more significant are the cuts for motorcycles with engine capacities exceeding 1,600 cc, with the tariff dropping from 50% to 30%. Additionally, the duty on semi-knocked down (SKD) kits, which are partially assembled motorcycles, has been lowered from 25% to 20%, and the import duty on completely knocked down (CKD) units, which are fully disassembled bikes, has been slashed from 15% to 10%.
This reduction in tariffs is expected to lower the prices of Harley-Davidson motorcycles in India, potentially increasing their affordability and making them accessible to a wider audience. The price reduction could lead to greater sales and further penetration of the brand in the Indian market.
The timing of these tariff cuts aligns with Trump’s longstanding calls for reciprocal trade measures. For years, Trump has criticized countries, including India, for imposing high tariffs on U.S. goods. He has consistently advocated for the reduction of such barriers, claiming that if other nations impose heavy tariffs on American products, the U.S. should respond in kind. Trump has previously stated that if India imposes a 100% tariff, the U.S. should impose an equivalent tax on Indian goods, aiming for a fairer trade relationship.
India’s decision to lower motorcycle import duties comes as part of a broader strategy to ease trade tensions with the U.S., especially as bilateral trade has surged. According to data from the Ministry of Commerce, India became the U.S.'s largest trading partner in the last financial year, a development that underscores the growing economic ties between the two nations. These tariff cuts, therefore, not only reflect a response to Trump’s demands but also signal a deeper engagement with the U.S. in terms of trade and market access.
