NEW DELHI: In its Union Budget for 2025-26, India has substantially reduced customs duties on premium motorcycles, cars, and smartphone components. This development appears advantageous for American companies such as Harley-Davidson, Tesla, and Apple, following remarks by US President Donald Trump describing New Delhi as a “tremendous tariff maker.”
Nonetheless, Finance Minister Nirmala Sitharaman stated that the adjustment of customs duties is aimed at promoting self-reliance within the Indian economy and is not a reaction to Trump’s tariff announcements.
“We are focusing on our own economy and aiming to fortify the foundations of the Indian economy to transform it into a manufacturing hub,” she asserted.
During her budget presentation on Saturday, Ms. Sitharaman disclosed a reduction in import duties for high-end motorcycles, with engine capacities up to 1,600cc imported as completely built-up (CBU) units, from 50 per cent to 40 per cent.
According to the Union Budget for 2025-26, the import duty on semi-knocked down (SKD) kits has decreased to 20 per cent from 25 per cent. Furthermore, completely knocked down (CKD) units will now incur a tax of 10 per cent, down from 15 per cent.
This shift is set to enhance the import of quintessentially American Harley-Davidson motorcycles into India, as the previous high tariffs have been a longstanding issue between India and the US.
Harley-Davidson began its journey in India in 2010, following the “mangoes for motorcycles” agreement established between India and the US in 2007. However, the American motorcycle manufacturer withdrew from the Indian market about ten years later, in September 2020, as part of broader downsizing efforts.
Nonetheless, a month later, Harley-Davidson re-entered the Indian market after Hero MotoCorp Ltd formed a non-equity partnership with the American brand to manufacture and distribute its motorcycles in India. Currently, Hero MotoCorp produces and sells the Harley-Davidson 440X, the smallest model in the brand’s lineup.
During his first term in office, Trump raised concerns regarding the 50 per cent import duty on Harley Davidson motorcycles, deeming it “unacceptable.”
Separately, Ms. Sitharaman announced that the tariff on luxury cars, including station wagons and racecars valued over $40,000, has been reduced from 125 per cent to 70 per cent. Additionally, the basic customs duties on lithium-ion batteries used in electric vehicles in India have been eliminated.
Most of the aforementioned EV manufacturers are already operational in India, developing vehicles tailored for the Indian market. However, this move could serve as a lure for American companies like Tesla, which is keenly observing the expanding Indian EV landscape.
In April 2024, Tesla CEO Elon Musk planned a visit to India to meet PM Modi, fueling speculation about potential investments in the country. However, he canceled the trip due to “very heavy Tesla obligations.”
In the 2025-26 budget, Ms. Sitharaman confirmed that customs duties on 28 items related to mobile phone battery production from countries such as the US and China have been waived. This initiative aims to lower the cost of mobile phones and accessories in India while bolstering local production, particularly as India progresses towards becoming the world’s second-largest mobile phone manufacturer.
Apple stands to gain significantly from these reductions in import taxes. A report from Reuters indicates that Apple secured a 23 per cent share of total revenue in 2024.
As US President Trump advocates for prioritizing domestic industry under his “America First” trade policy, India’s recent adjustments to import taxes are perceived as a strong signal to the American administration, seeking assurance against increased taxes or additional trade barriers directed at Indian goods.
Previously, Trump asserted that India imposes the highest tariffs on foreign items compared to major economies and threatened to enforce reciprocal tariffs on Indian products. He also warned of 100% tariffs on BRICS nations, including India, if they moved away from the US dollar.
Speculation arises that with the tax reductions on imports, India aims to capitalize on the US-China trade conflict and augment its own presence in global supply chains. Trump’s tariffs are becoming disruptive to global trade, creating uncertainty in the market. With the import tax reductions, India should be better positioned to navigate a potentially unpredictable year, as reported by Reuters.
In a promising move for the new US administration under President Donald Trump, India has reduced the import duty on high-capacity motorcycles in the Union Budget 2025-26, providing a significant advantage for the American brand Harley-Davidson.
Motorcycles with an engine capacity of up to 1,600 cc, imported as completely built-up (CBU) units, will now incur a 40% import duty, down from the previous 50%, as outlined in the Budget documentation.
The import duty on semi-knocked down (SKD) kits has been lowered to 20%, from 25% previously.
For completely knocked down (CKD) units, the tax rate will be set at 10%, reduced from 15% earlier.
The government’s objective is to encourage domestic manufacturing.
Reports also indicate that India is considering a reduction in customs duty on approximately seven to eight high-end products, including specialized steel, luxury motorcycles, and electronic goods.
Currently, the Harley-Davidson 440X – the smallest model in the brand’s lineup – is co-manufactured and sold in India by Hero MotoCorp.
Additionally, the Budget specified that high-end cars priced over $40,000 will now face a tariff of 70%, down from 125%, reflecting the increasing demand for luxury vehicles in the country.
Hero MotoCorp, which produces the Harley-Davidson X440 and the X440-based Hero Mavrick 440, reported sales of 12,188 units for these two models during the April-December 2024 timeframe.
This marks a year-on-year growth of 77%, giving Hero MotoCorp a 13% share of this market segment.
The Made-in-India Harley-Davidson is manufactured at Hero’s Garden Factory in Neemrana, Rajasthan.
It is available in three variants – Denim (₹2.40 lakh), Vivid (₹2.60 lakh), and S (₹2.80 lakh) – with 8,974 units sold between April and December 2024, representing a 31% increase according to industry data.
(This content was sourced from a syndicated feed and only edited for style by the Gujarat Samachar Digital team)
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American motorcycle brands, including Harley-Davidson, could see a price drop in India following the Budget 2025 announcement by Finance Minister Nirmala Sitharaman on February 1, 2025. The budget has reduced import duties on high-capacity motorcycles.
Also Read: Hero and Harley Davidson to introduce new motorcycle and launch new X440 variants
The import duty for motorcycles with engine capacities up to 1,600 cc, which are imported as completely built-up (CBU) units, has been decreased from 50 percent to 40 percent.
Harley Davidson is renowned for its high-capacity motorcycles.
Moreover, the import duty on semi-knocked down (SKD) kits has been lowered from 25 percent to 20 percent, while completely knocked down (CKD) units now incur a tax of 10 percent, reduced from the previous 15 percent.
This tariff reduction is a response to threats from US President Donald Trump regarding reciprocal taxes on nations imposing high tariffs on American goods.
In December, Trump remarked that India’s taxes are excessive, asserting, “If they tax us, we tax them the same amount.”
According to the Ministry of Commerce, India emerged as the largest trading partner of the US last financial year.
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Additionally, the tariff on Harley-Davidson bikes has been a contentious issue between India and the US for years, with Trump advocating for its reduction.