Harley-Davidson motorcycles to enter India duty-free under interim US agreement

Harley Davidson motorcycle (Representative/File image)

• India to remove import duties on Harley-Davidson bikes under new US trade deal
• Tariffs on high-end cars above 3,000 cc to drop to 30 percent from 110 percent
• Electric vehicles are excluded from the agreement

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India has agreed to eliminate import duties on Harley-Davidson motorcycles with engine capacities between 800 cc and 1,600 cc and to reduce tariffs on high-end cars under an interim trade agreement with the United States, government sources said.

Electric vehicles are not included in the deal.

These concessions are expected to take effect once the agreement is signed, likely around March.

To be sure, tariffs on Indian exports will drop to 18 percent once the US issues an executive order expected next week, while further concessions from America and any corresponding reductions by India will only take effect after the deal is formally signed.

Under the agreement, Harley-Davidson motorcycles will face zero import duties from day one, while other high-end vehicles in the same category will only receive reduced tariffs, the source added.

For other high-end internal combustion engine vehicles, India will cut import duties to 30 percent from as high as 110 percent, but this applies only to cars with engine capacities above 3,000 cc.

Sources clarified that lower and mid-tier automobiles will not get tariff concessions under the trade deal.

In return, India will receive a preferential tariff-rate quota for exports of automotive parts.

Commerce Minister Piyush Goyal said that once the interim trade deal kicks in, some Indian auto parts will enter the US at zero duty, while others will face an 18 percent tariff.

India has offered similar concessions in trade agreements with the European Union and the United Kingdom.

Under those deals, import duties on European luxury vehicles will be gradually reduced over several years, in some cases down to around 10 percent, giving foreign manufacturers greater access to the Indian market.