US President Donald Trump's India Visit Might Bring Good News For Harley Davidson Fans

US President Donald Trump is on his first official visit to India on the invitation of Indian Prime Minister Narendra Modi. Expected to improve the bilateral relations between the two nations they represent, an interesting point of discussion between the two might possibly involve the renowned US motorcycle manufacturer Harley Davidson.

Reuters

The possible discussion will be around the taxes imposed on Harley Davidson motorcycle units by India as import duty. Trump has earlier demanded PM Modi to lower the taxes on the motorcycle units by the firm to improve its sales in the country, citing which the import duties on Custom-Built Units (CBU) bikes was cut to 50% from 100% back in 2018.

The POTUS mentioned this in an interview to CBS, ¡°We're not the foolish country that does so badly. You look at India, a very good friend of mine, Prime Minister (Narendra) Modi, you take a look at what they've done, 100 per cent tax on a motorcycle. We charge them nothing."

He added, "He (Modi) reduced it by 50 per cent with one phone call. I said it's still unacceptable because it's 50 per cent versus nothing. It's still unacceptable. And they're working on it.¡±

With this visit, Trump is likely to bring up the topic again and if so, the taxes on CBU bikes might be slashed to a single digit if India finds it viable.

(Representative Image: Harley Davidson India)

Will the prices for Harley Davidson bikes drop?

Technically, yes but only to a limited extent. Most of the Harley Davidson motorcycles imported to India are in Completely Knocked Down (CKD) forms. As per a last year¡¯s report by ET, 13 of the 17 motorcycles in Harley Davidson India¡¯s lineup are assembled locally, which means that the bikes are brought into the country as CKD units.

Hence, tax slash on CBU bikes will not really affect most of the lineup¡¯s prices in India. In contrast, India increased the import taxes on the CKD units to 15% from an earlier 10%. Hence, instead of dropping, the prices of most of Harley motorcycles have gone up.

That being said, the rest of the models that are flown in as CBUs will definitely benefit if India complies to US President Trump¡¯s demands. This includes the category of bikes with engines bigger than 1600cc. A possible new tariff for such motorcycles will help grow the appeal for these bikes in India with a lower price tag.

Moreover, if carried through, the new and relaxed taxation will possibly be applied across the OEMs. Hence other bikes from the likes of Honda, Triumph and others will also become cheaper and hence more accessible to the Indian bike enthusiasts. So for those hoping to get one such big and mean machine for themselves, Trump¡¯s visit might just be the lucky break!

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