The development comes after India and the US announced they have reached a framework for the first phase of the bilateral trade agreement. After India and the United States announced a new trade deal earlier this week, details of the interim agreement between the two large economies have started to come out. Under the trade deal, India is set to grant zero-duty access to US motorcycle makers for bikes with engine capacities of 800-1,600 cc and above, an official said. The move is set to benefit American brand Harley-Davidson, whose motorcycles are among the most sought-after. The official said that the duty elimination will come into effect on the day of the implementation of the agreement.
Harley Davidson’s portfolio includes bikes like Street 750, Iron 883 among others. The development comes after India and the US on Saturday announced that they have reached a framework for the first phase of the bilateral trade agreement under which both sides will reduce import duties to boost trade. The first phase of the pact is expected to be signed by mid-March. Under the agreement, the US will reduce reciprocal tariffs on Indian goods to 18 per cent, from the earlier 50 per cent. Last year, the government had reduced import duty on motorcycles with engine capacities of up to 1,600 cc from 50 per cent to 40 per cent.
Will zero-duty access hurt local production?
The straight answer is no. India has a small market for high-end premium bikes. Moreover, US only has a tiny share in the segment. Though the market of high-end bikes is small, but the move assumes significance. US President Donald Trump, on several occasions, 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 2020, Hero MotoCorp and Harley-Davidson announced a partnership for the Indian market. The deal proposed Hero MotoCorp developing and selling a range of premium motorcycles under the Harley-Davidson brand in India. Meanwhile, Hero MotoCorp was also mandated to sell Harley accessories and general merchandise, riding gear and apparel through a network of Harley-Davidson dealers and its existing sales network.
India has allowed the import of several US goods at zero tariffs, where the local production is inadequate, or to meet quality standards and lower market price. Union minister Piyush Goyal listed several products, including alcoholic beverages, cosmetics, and medical devices will face zero tariffs in India.
