Imported bikes to cost less in India, but Trump isn't impressed

On Wednesday US President Trump criticized India for imposing high import duty on the US manufactured Harley-Davidson motorcycles. He even went to an extent of threatening to increase the import tariff on “thousands and thousands” of Indian motorcycles to the US.

While Trump quoted that India sells 'thousands and thousands' of bikes to the USA, it isn't true. India exports a very few motorcycles to the US because they prefer high-end performance motorbikes.

It is only the Royal Enfield that meets the high-end standards of US. And as per the records, US imports less than 1,000 bikes every year to that country. President Trump has called for a reciprocal tax for ‘abuse trade relationships with the US'.

This isn't the first time that Trump has given such a statement, in an address to Congress on March 1 last year, he mentioned that he was concerned about the US manufactured motorcycles facing heavy tariffs as high as 100 percent in overseas markets, giving an indirect hint on the Asian market, especially India.

However, this time it is a direct attack on India. During a discussion on the steel industry with the Congress members, Trump targeted the tax reduction decision of the Indian government. On February 12, The Central Board of Excise and Customs (CBEC), India slashed the duty from 75 percent to 50 percent.

Trump even said that “We have so many countries where we made a product, they make a product, they pay a tremendous—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,” Trump said.

He further added, “So I say we should have reciprocal taxes for a case like that. I’m not blaming India. I think it’s great that they can get away with it. I don’t know why people allowed them to get away with it. But there’s an example that’s very unfair. And I think we should have a reciprocal tax,” the US president said.

He also indirectly hinted on the conversation he had with the Indian Prime Minister, Narendra Modi. Trump quoted, “And a great gentleman called me from India and he said, we have just reduced the tariff on motorcycles, reduced it down to 50% from 75, and even 100%.”

Harley in India

The recent trade reports state that there has been a 30 percent increase in the sale of Harley in past years. If we talk about the dealership then there are 27 dealers in 17 cities across India since the American brand entered the Indian market. Harley-Davidson India's bulk of sales come from the made in India Street 750. While Harley-Davidson leads the sales numbers in bikes costing Rs 5 lakh or more, Kawasaki with 761 bikes and Triumph with 750 bikes are trying to grab.