Siddhartha Lal, Executive Chairman of Eicher Motors and parent company of Royal Enfield, on Saturday made an appeal to the government for a uniform 18% GST on all two-wheelers, warning that a split tax regime could damage India’s global competitiveness in the sector.
In a detailed statement on LinkedIn, Lal said raising GST on motorcycles above 350cc would add negligible revenue but contract the segment that has been central to India’s global edge. “A split tax regime would cripple investment and scale, restrict global reach, and hand an opening to foreign competitors,” he said.
Lal underlined that India’s two-wheeler industry is the “clearest success story of the Make in India initiative” and the only manufacturing sector where Indian brands lead globally. Backed by strong government support and a large domestic base, Indian manufacturers have achieved unmatched scale and capability, setting international benchmarks in technology, quality, cost-efficiency and distribution.
He noted that Indian brands already dominate the small-capacity motorcycle segment worldwide, and through significant investments, are now making deep inroads into the mid-capacity market. “By delivering exceptional value, we are drawing riders worldwide to shift from larger, higher-displacement machines to Indian-made mid-size motorcycles,” Lal said.
To sustain this momentum, Lal stressed that “a uniform GST of 18% across all two-wheelers is critical.” While lowering GST for motorcycles under 350cc will help broaden access, raising GST for those above 350cc would damage a vital segment and undermine India’s global leadership.
According to Siddhartha Lal, a differential tax structure would:
Cripple Investment and Scale: Shrinking the >350cc segment and choking much-needed investment.
Restrict Global Reach: Limiting Indian brands to smaller-capacity two-wheelers and undermining their ability to build strong international dealer networks.
Hand an Opening to Foreign Competitors: Rivals from countries without such tax distortions would seize the mid-size motorcycle market internationally and erode India’s leadership.
Lal pointed out that motorcycles above 350cc account for just 1% of India’s two-wheeler market, and raising GST on them would contribute negligible revenue. “For Indian riders, these motorcycles are not luxury goods; they are efficient, affordable alternatives to cars, offering lower fuel use and maintenance — benefits that also help reduce India’s fuel imports,” he added.
Highlighting the long-term stakes, Lal said India already leads China, Japan, Europe and the US in the two-wheeler market. A uniform 18% GST would not only secure this leadership but also enable India to dominate the global electric two-wheeler market.
“By achieving scale in EVs, India can establish itself as the world’s hub for next-generation mobility. This will anchor allied industries — from batteries to semiconductors and advanced electronics — creating a powerful ecosystem that ensures India’s global leadership for decades to come,” Lal emphasised.
According to reports, the proposed GST restructuring may lower the tax incidence on smaller motorcycles to 18 per cent, while higher-capacity bikes could face steeper levies. Royal Enfield, part of Eicher Motors Ltd, dominates the mid-sized motorcycle market and would be directly impacted.
At present, automobiles fall under the highest GST slab of 28 per cent, with an additional compensation cess ranging from 1 to 22 per cent depending on vehicle type.
The GST Council, headed by Finance Minister Nirmala Sitharaman, is set to meet on September 3-4 to consider shifting to a two-slab structure and phasing out the 12 per cent and 28 per cent rates. Currently, the GST framework comprises four tiers — 5, 12, 18 and 28 per cent.
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