Harley-Davidson bikes may get cheaper in India
What's the story
As part of the interim trade agreement between India and the US, Harley-Davidson is likely to be the biggest beneficiary. The Indian government will exempt import duties on motorcycles with engine capacities of 800cc and above. This move is expected to make high-end American motorcycles more affordable in India. Currently, combined taxes on such imported vehicles can go as high as 110%.
Tax benefits
Tax rates on high-end American vehicles
The new trade agreement could reduce the tax rates on high-end imported American vehicles to as low as 30%. This would be a major boost for Harley-Davidson bikes, which have been struggling in the Indian market. In 2025, the Indian government had already reduced import duties on motorcycles with engine capacities up to 1,600cc from 50% to 40%. For those over this capacity, duties were slashed from 50% to a mere 30%.
Market strategy
Harley's exit and partnership with Hero MotoCorp
Harley-Davidson had exited the Indian market due to poor sales in 2020. However, it later announced a partnership with Hero MotoCorp to co-develop and sell premium motorcycles in India. As part of this deal, Hero MotoCorp will handle service and parts requirements for Harley bikes in the country. This move is significant as US President Donald Trump has been advocating lower tariffs to boost Harley-Davidson sales in India.
Trade concessions
Other key aspects of the trade agreement
Union Commerce Minister Piyush Goyal has announced that basic auto parts exported by Indian manufacturers will face zero tariffs in the US. Some components will still be subject to duties. The Indian government is also likely to reduce import duty on US diesel vehicles with engine capacities of 2,500cc and above and petrol vehicles of 3,000cc and above.
EV impact
Impact on Tesla and domestic automakers
Notably, no duty cuts or exemptions are planned for electric vehicles. This could affect Tesla and its owner Elon Musk, who have been pushing for lower duties to expand their presence in India. However, domestic auto giants Mahindra & Mahindra and Tata Motors Passenger Vehicles may be relieved by this decision.