Trump in India: US President to Seek a Tax Cut on Harley-Davidson Motorcycles

US President Donald Trump is about to go to India for the primary time on the invitation of Prime Minister Narendra Modi on February 24 and 25, 2020. While this go to will present a possibility to enhance the bilateral relationship and way more, one of many issues that would additionally occur is that PM Modi may give what Trump has been asking for all this whereas – decreasing of taxes on bikes made by American automaker Harley-Davidson.

US President Donald Trump had earlier stated 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.”

Trump was referring to the import duty which earlier stood at 100 per cent for vehicles coming into India as Completely Built Units (CBU).

Trump had 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.”

However, whereas the import tariff on CBUs was dropped right down to 50 per cent from 100 per cent, the duties on automobiles that come to India in Completely Knocked Down (CKD) kind had been raised to 15 per cent, from 10 per cent.

Now, as per a report by Livemint, India has promised to chop import duties to ‘a single-digit’ for bikes having engines larger than 1600cc by arising with a brand new tariff classification for such bikes.

This transfer, ought to it occur, may additionally go on to assist different automakers who additionally promote bikes with engines bigger than 1600cc. This consists of the likes of British automaker Triumph Motorcycles, Honda Motorcycles and Indian Motorcycles (additionally an American bikemaker).

In the final monetary yr, Harley-Davidson had rather less than 2,700 models bought in India, majority of which had engines starting from 883cc to 1200cc – most of that are all coming to India within the CKD kind. So, even when import duties on CBU bikes with engine capability of greater than 1600cc sees a lower, it might not truly make a lot of a distinction to the gross sales of Harley-Davidson in India. Or even the brand new classification of bikes over 1600cc as an entire.