India's Big Signal On Tariff: Duty On Harley Cut Amid Trump's Demand

Tariffs on Harley Davidson bikes, a mushrooming friction point between India and the US -- have been slashed further ahead of Prime Minister Narendra Modi's proposed visit. In the Union budget 2025 announced today, the government announced a reduction in basic customs duty on the import of motorcycles.

For motorcycles with engine capacity not exceeding 1600 cc, the duty on CBUs (Completely Built Up) has been slashed from 50 per cent to 40 per cent. For larger motorcycles with engine capacity exceeding 1600 cc, the reductions are higher. 

Though basic customs duty on the import of cars and other motor vehicles has also been reduced, it is not clear whether their effective duty rates will change. 

The high tariffs in India had been a sore point with US president Donald Trump, who has recently won a second stint.

Calling India a "tariff king", President Trump has recently threatened to impose reciprocal tariffs on Indian products, notwithstanding his bonhomie with PM Modi.

In an interview to CBS News, the US President had said: "We're not the foolish country that does so badly. You look at India, 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," President Trump said.

"So, when Harley sends over there, they have 100 per cent tax. When they (India) send in they make a tremendous number of motorcycles when they send them in, no tax. I called him. I said it's unacceptable," he added, referring to his conversation with PM Modi.

"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," he added.

In February last year, India had cut duty on imported motorcycles to 50 per cent.