India-US trade deal: Zero duty for large bikes, to benefit Harley-Davidson

India will grant zero-duty access to US motorcycle makers for bikes with engine capacities of 800-1,600 cc and above under the interim trade agreement, a move that would benefit iconic American brand Harley-Davidson, an official said on Saturday.

 

Last year, the government reduced import duty on motorcycles with engine capacities of up to 1,600 cc, which are imported as completely built-up (CBU) units, from 50 per cent to 40 per cent.

 

For motorcycles with engine capacities exceeding 1,600 cc, the duty was curtailed to 30 per cent from 50 per cent.

 

India and the US on Saturday issued a joint statement on an interim trade pact, which is expected to be signed by mid-March.

 

 

The official said that the duty elimination will come into effect on the day of the implementation of the agreement.

 

India is a small market for high-end premium bikes, and the US share in the segment is minuscule.

 

The move assumes significance as the US President has on multiple occasions earlier flagged concerns over India's import duties on Harley-Davidson motorcycles, saying the company was unable to sell its bikes in the country due to high tariffs.

 

In October 2020, Hero MotoCorp and Harley-Davidson announced a partnership for the Indian market. The deal envisaged Hero MotoCorp developing and selling a range of premium motorcycles under the Harley-Davidson brand in the country.

 

It is also entrusted to take care of service and parts requirements for Harley bikes.

 

Hero MotoCorp also has the mandate to sell Harley accessories and general merchandise, riding gear and apparel through a network of brand-exclusive Harley-Davidson dealers and its existing sales network in the country.

 

Further, under the trade agreement, India will also provide duty concessions on imports of US cars - diesel vehicles with engine capacities of 2,500 cc and above and petrol vehicles of 3,000 cc and above, the official said.

 

The US will also remove reciprocal tariffs on certain auto parts from India, while on some other components, it will be 18 per cent.

 

In September 2020, the Milwaukee-based cult bike manufacturer stated that it was discontinuing its current business model in India.

 

Harley Davidson's portfolio included bikes like Street 750, Iron 883 among others.