PM Modi’s Gift to Trump: Harley-Davidson Bikes May Become Cheaper

India may slash import duty on large-capacity motorcycles, which will favour Harley-Davidson in particular.

Harley-Davidson riders during the 4th India HOG Rally.

(Photo: The Quint)

Harley-Davidson bikes and the import duty charged on them by India has always bugged US President Donald Trump. He has been constantly lobbying Indian Prime Minister Narendra Modi to bring down tariffs for the past two years.

Now, according to a Bloomberg report, India may cut import duties for Harley-Davidson motorcycles by creating a separate tariff classification for them as part of the ongoing trade talks with the US. This would affect bikes with engine capacity over 1,600 cc.

The report says that Indian officials are likely to reduce tariffs to "a single digit" for bikes with displacement above 1,600cc.

India has earlier partly given into pressure from Trump, reducing import duty on completely built units (CBU) of motorcycles from 100 percent to 50 percent. But “that’s not good enough” for Trump.

However, while reducing import duties on CBUs, India hiked customs duty on CKD (completely knocked down) units of motorcycles from 10 percent to 15 percent. Most of Harley-Davidson’s bikes are CKDs, falling in the 883 cc to 1,200 cc engine capacity range.

How much of a difference with the reduction in duty make? Not much. Prices of Harley-Davidson bikes range between Rs 5.5 lakh and Rs 51 lakh.

Harley-Davidson sold a little under 2,700 bikes in the last financial year, most of which were in the 883 cc to 1,200 cc range.

But to Trump it will seem like a win, until someone does the math for him.