Harley Davidson motorcycles may get cheaper in India thanks to Trump

Harley Davidson CVO

So far, Donald Trump has earned many fans in India for his tough stance on terrorism, especially that emanating from India’s western neighbor Pakistan.

Soon, he may win over a new class of fans — bikers — thanks to his latest attempts to reduce import duties Harley Davidson bikes in India.

India has a policy of charging 100-120% import duty on completely built units of motorbikes and cars, to encourage local manufacturing.

To encourage local manufacturing and assembly, the import tariff is reduced to 50%-60% in case the vehicle is imported in parts and assembled here.

This has encouraged many companies, such as BMW and Mercedes Benz, to set up assembling plants in India to reduce costs.

Even as companies start by importing all components from abroad and screwing them together in India to reduce duties from 120% to 60%, they gradually start to buy some of the components from the Indian market to reduce it further from 60% to 0%.

Many luxury carmakers, such as BMW and Mercedes Benz, today purchase a substantial number of the parts that go into their cars from Indian suppliers, instead of importing them.

Harley Davidson, however, has not set up manufacturing operations in India, and relies on its US factories to make the motorcycles.

As a result, the cheapest of the Harleys — that should cost around Rs 2.5 lakh ($3,850) in India — ends up costing nearly Rs 5.0 lakh, hurting die-hard Harley fans in India.

If Trump has his way, this may change without the US company setting up an assembly line in India.

Speaking to governors of US states on Tuesday, Trump held up the case of Harley Davidson in India as an example of the US getting unfair treatment from its trading partners.

He said the US imposes zero import duty on Indian exports of motorcycles to the US, while the Asian nation imposes 100%.

“When I spoke with the chairman or president of Harley, they were not even asking for it, because they’ve been ripped off with trade so long, that they were surprised that I brought it up,” Trump said, addressing the governor of the US state of Wisconsin, home to Harley Davidson’s headquarters. “I’m the one that’s pushing it more than they are.”

“It’s unfair, and India sells us a lot of motorbikes.. a big number, by the way, they have a company that does a lot of business in the US.

“When they have a motorbike that comes into our country, the number is zero. We get zero (tax), they get a 100%, brought down to 75%, brought down now to 50%.”

He said he was surprised that Indian prime minister Narendra Modi made a big deal of the reduction of the import tax on motorbikes from 100% to 50%.

“He (Modi) said, I just want to inform you, that we have reduced it to 75(%), and we’ve further reduced it to 50(%). And I said: Huh! What do I say, am I supposed to be thrilled?!”