US president Donald Trump has come down heavily on high import duties that India levies on imported motorcycles like the ones that Harley Davidson sells here. He called such import duties unfair as the USA does not levy such import duties on motorcycles that are imported.
The US president has also threatened India with higher import duties on bikes exported from India to the US as a tit-for-tat measure. Trump also referred to Indian prime minister Narendra Modi, saying that Modi had informed him of India reducing duties on CBU imports (bikes that are fully built elsewhere and imported into India).
Here are some of Trump’s comments on this issue,
We have so many countries where we made a product, they make a product, ..We pay a tremendous tax to get into their countries — motorcycles, Harley Davidson — it goes into a certain country. I won’t mention the fact that it happens to be India, in this case. And a great gentleman called me from India and he said, we have just reduced the tariff on motorcycles, reduced it down to 50 per cent from 75, and even 100 per cent. We have — if you are Harley Davidson, you have 50 to 75 per cent tax, tariff to get your motorcycle, your product in. And yet they sell thousands and thousands of motorcycles, which a lot of people don’t know, from India into the United States. You know what our tax is? Nothing!
Trump also said that India sells thousands and thousands of bikes in the USA, without having to pay import duties on them. The first part of Trump’s assertion about India exporting thousands of bikes to the US is not true at all. India exports very few motorcycles to the US, which is predominantly a market that prefers high-end, high performance motorcycles, not the commuter bikes that India generally exports around the world. The only notable Indian brand selling motorcycles in the US is Royal Enfield, which exports less than 1,000 bikes every year to that country.
Trump has called for a reciprocal tax that he wants the US to levy on countries that he believes ‘abuse trade relationships with the US’. According to President Trump, India may one such country has he repeatedly has called the high import duty on Harley Davidson motorcycles imported into India as unfair. So, will we see USA charging import duty on Royal Enfield motorcycles? Well, that is something that only time can tell.
For now, the President of that country is clearly displeased with India’s high import duties. This, despite India recently reducing the import duty on CBU (completely built unit) motorcycles, such as most high-end Harley Davidsons, from 75 % to 50 %. This is expected to make high-end CBU motorcycles imported into India, which have engine capacities of more than 800cc much cheaper. The import duty on CBU motorcycles with engine capacities less than 800cc has also been slashed, from 60 % to 50 %.