While US President Donald Trump’s well-publicised comments on import duties as high as 100% on Harley Davidson motorcycles seemed aimed at India — “they weren’t even asking for a change … but I am” — the commerce ministry is arguing India is not to blame. And, were Harley to work harder, the import duties could be as low as 10%.
Sources said the Indian embassy in Washington is being armed with facts and figures to counter any misconceptions, although, under the WTO law, India is within its rights to impose duties of up to 100% on luxury motorcycles.
On facts, the government is pointing out import duties are 60% on motorcycles that are less than 800cc, and the duty is 75% for bigger engines — the 100% duty only applies to second-hand motorcycles since India doesn’t want to become a dumping ground. The duty, however, falls to 30% if the motorcycle is imported in SKD form and to a mere 10% if imports are in CKD fashion and assembled in India.
It is to lower duties that Harley Davidson runs a plant in Bawal in Haryana where it manufactures motorcycles. Though a company spokesperson did not provide numbers, he said motorcycles are built from scratch here, assembled from CKD kits and completely built units (CBUs) were also imported.
That means, as Harley is able to develop its Bawal plant, its import duties will fall dramatically. Global manufacturers like Honda, Yamaha and Suzuki have large Indian plants and do not complain about high duties.
A lot is being said there, and amid the clutter, it’s very important for India to keep engaging with the US to convey the actual picture on issues like Harley Davidson and visas etc. If India doesn’t do that, vested interest will try to influence the Trump administration’s policies towards it,” said a government official.
Last year, Harley-Davidson registered record sales in the Asia-Pacific region, selling around 33,000 across the region. And its plant in India is its only one in the region. India sales of Harley-Davidson, which started assembling some bikes in the country in 2011, to beat the high duty regime, rose 30% over the past two years.
Also, tariffs on motorcycles are fairly common in Asia. Thailand slaps up to 60% duty on bikes, Indonesia pegs it at 40% while China and Malaysia impose 30%.