During his recent visit to India, US President Donald Trump talked about India’s high import tariffs and how it affects trades between the two nations. For instance, the American motorcycle company Harley-Davidson pays a huge sum of money to India as import duties.
This isn’t a new debatable topic as both countries have had discussions about this problem in the past. While no tariff reduction was announced during Trump's India visit this month, the U.S. President has indicated that talks are still going on with India to slash the high import duties.
"We’re being charged large amounts of tariffs, and you can’t do that. I just said that’s unfair, and we’re working it out. The money you’re talking about is major, but the United States has to be treated fairly. And India understands that,” said Trump.
Last year, India cut the customs duty on complete built-up units (CBUs) from 100% to 50%, but it increased the import tariffs on completely knocked down (CKDs) units from 10% to 15%. Since most of the Harley-Davidson motorcycles in India come via the CKD route and are responsible for the majority of the brand's sales, this hike in the import tariffs had a direct impact. At present, Harley-Davidson manufactures 2 motorcycles in India (3 if you consider the Street 500), assembles 11 motorcycles as CKD and imports 4 products in CBU form.
Earlier reports had said that the Indian government may reduce the import duty to “a single-digit” for imported motorcycles which have an engine displacement above 1,600 cc. When it comes to global sales, Harley-Davidson is having a hard time. Last year it sold 2,28,424 units, marking a decline of 4.6%. In India, the volumes dropped by over 25%, while the U.S. market saw the numbers plummet by 5.2%.
Harley-Davidson has had its presence in India for many years now and today has a well-established network spread nationwide. Its motorcycles are quite different from the usual lot and that’s one of the many reasons why it has a huge fan following. Harley-Davidson has an array of products the prices of which start at INR 5.34 lakh* and cross the INR 50 lakh* mark.