Harley Davidson pricing in India: The aspiration of Indian Harley-Davidson enthusiasts to ride proudly on a large American motorcycle may have gained significant momentum, based on reports suggesting impending substantial duty reductions. According to a report by The Times of India on April 25, the government is contemplating the extension of duty-free import options for certain vehicles from the U.S., which includes motorcycles boasting engine capacities greater than 1,600cc, depending on the establishment of a favorable agreement in critical interest areas. It is worth noting that some of the benefits being negotiated may be limited by quotas, meaning that the reductions in duty could pertain only to a specific number of units imported under the envisioned bilateral trade deal, as indicated in the report.
It’s important to highlight that the United States has been exerting considerable pressure on India to lower tariffs on several goods, such as vehicles, whiskey, and agricultural products, claiming that the high import duties hinder American exports.
While India did lower customs duties on certain products like premium motorcycles and bourbon in February, the Trump administration has remained unsatisfied, pushing for further cuts. Harley Davidson motorcycles and Tesla vehicles have become a priority for Trump, especially given Elon Musk’s close ties with the U.S. President.
Musk has been actively lobbying for lower import tariffs during his discussions with Indian officials, a request previously declined by the government. Nevertheless, India introduced a new policy last year that implemented a temporary 15% tariff rate, with the condition that participating companies establish manufacturing facilities in the country.
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Detailed guidelines regarding these tariffs are expected to be unveiled shortly, as inter-ministerial discussions are underway. A significant reduction in tariffs could potentially reshape investment decisions. With the threat of retaliatory tariffs looming, the commerce department, leading negotiations for a bilateral trade agreement, is collaborating with various government departments and ministries. These entities are actively consulting industry representatives and other relevant stakeholders. While formal negotiations on specific sectors have yet to commence, a delegation headed by India’s chief negotiator, Rajesh Agrawal, is currently in Washington to tackle outstanding issues and explore the possibility of an “early tranche” of agreements.
Initially, discussions between Trump and Indian Prime Minister Narendra Modi aimed to finalize the first tranche by fall (September-October), which would include import duties on goods, non-tariff barriers, and strategies to optimize the supply chain.
India remains hopeful that, in exchange for concessions offered, the Trump administration will abstain from imposing the 26% reciprocal tariffs that are presently on hold for 90 days, while also considering reductions on duties related to labor-intensive exports such as textiles and leather goods from India.
Trump’s tariffs could negatively affect Indian markets, but certain goods such as iPhones and Harley Davidson motorcycles may decrease in price.
US President Donald Trump has been alerted that reciprocal tariffs will be placed on Indian goods, indicating that the US will match the import duties imposed by India on American products.
(File)
Trump Tariffs: US President Donald Trump has unveiled reciprocal tariffs on imports from various nations, including India, effectively initiating a tariff dispute that could alter global trade dynamics. Trump’s tariffs, set to take effect from April 2, are poised to impact Indian markets adversely, yet American products such as iPhones, Harley Davidson motorcycles, and laptops may become more affordable, offering Indian consumers access to high-quality goods.
Why will American-made goods become more affordable?
Donald Trump has been warned that the US will implement reciprocal tariffs on Indian products, meaning that the US will levy the same import duties on Indian goods as India has placed on American imports. Presently, India applies up to 110% import duties on American products, and Trump is urging New Delhi to significantly reduce these ‘excessive’ tariffs, thus allowing US products to better compete with local offerings as they will be priced more attractively.
Which products will see price reductions?
Should India and the US finalize a new trade agreement, India might lower import duties on American items including electronic devices, steel, engines, tires, spare parts, medical supplies, and several food products such as almonds, walnuts, and wine. This could result in popular gadgets like Apple iPhones, laptops, and smartwatches, along with vehicle parts and health-related products, becoming less expensive in India.
Furthermore, high-end motorcycles like Harley Davidson will also become more affordable, given that India currently imposes a 100% import tariff on American automotive brands. In the electronics sector, products from renowned US tech companies like Apple, Dell, and Hewlett-Packard could see a price drop.
The cost of dairy items like cheese and butter may also decrease, offering relief to consumers.
What impact could tariff reductions have on Indian industries?
While lower tariffs on American goods will make them more affordable, increasing their uptake in the Indian market, this new trade policy will also profoundly affect India’s domestic products, which will now face competition from international brands.
Experts suggest that American brands may dominate the electronics market, while Indian car manufacturers might experience financial setbacks if tariffs on auto parts are reduced. Additionally, India’s pharmaceutical and dairy sectors might encounter challenges. However, if the central government strikes an equilibrium, it could protect local businesses from losses while benefiting consumers.
If auto parts become less expensive, Indian automotive manufacturing firms could face financial difficulties. The pressure on the pharmaceutical sector and the dairy industry will also rise. Nevertheless, if the government finds the right balance, it could benefit Indian consumers while simultaneously safeguarding local industries from setbacks.
Donald Trump has issued a warning regarding reciprocal tariffs, which would result in the US imposing the same tariff rates as those levied by other countries on American exports.
Harley-Davidson currently partners with Hero MotoCorp in India, with the X 440 being their first collaboratively designed model.
US President Donald Trump has advocated for reciprocal tariffs on countries, corresponding to the rates at which they impose tariffs on American goods. During discussions with Prime Minister Narendra Modi, Trump criticized India’s high tariffs on US-manufactured Harley-Davidson motorcycles.
In his second term, Trump has reiterated the notion of reciprocal tariffs, asserting that this aligns with his vision of equitable trade practices. He previously imposed a 25% tariff on specific imports from Canada and Mexico, though that initiative was temporarily paused until the end of February. He has also targeted regions like the European Union, China, and India. “Currently, we are a reciprocal nation… Whatever tariffs India charges us, we will reciprocate, and I believe this is only fair,” he stated. “I recall when Harley Davidson struggled to sell their motorcycles in India due to steep taxes and tariffs, which led them to establish local manufacturing to circumvent these costs. Others might consider similar strategies in their dealings with us.”
While both India and the US maintain significant trade relations, Trump’s tariff threats do not single out any specific country. By promoting domestic production and leveraging his presidential campaign on the promise of creating more American jobs, Trump signals his desire for production capacities to develop or increase in the United States rather than relying heavily on imports.
What happened to Harley-Davidson in India?
Harley-Davidson entered India in 2009, launching its first dealership in 2010. Known as a premium brand in the US, Harley initially imported models such as Sportster, Dyna, VRSC, Softail, and CVO. However, as the years went by, the company began to locally assemble certain models, including the Street 500 and 750 in Bawal, Haryana.
Despite the vast two-wheeler market in India, penetrating the premium segment posed significant challenges. In September 2020, Harley-Davidson announced its exit, citing weak demand and disappointing sales figures. However, it wasn’t a complete exit; the American company partnered with Hero MotoCorp in October 2020, designing a framework for Hero to enable sales and servicing of Harley’s motorcycles. By 2023, their first joint project, the Harley-Davidson X440, launched at a price of ₹2.30 lakh (ex-showroom).
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