100% tariff on U.S. made Harley-Davidson motorcycles

Automotive - Vinay Mishra - Mar 02,2017

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India charges a tariff of 100% on U.S. made motorcycles that is a big competitive disadvantage for Harley-Davidson as sales rose 30% in the last two years.

India is among the two biggest markets for motorcycles. In India, 16.5 million motorcycles and motor scooters were sold last year, which is 50 times greater from that of US and they represent 80% of all vehicle sales in India. Harley-Davidson has less than 1 percent market share in India. Harley-Davidson sales in India rose 30 percent in the past two years and is expected to grow further.

India is the only country to charge a tariff of 100 percent on motorcycles. However to avoid tariffs Harley-Davidson began assembling their bikes in India from 2011, so the motorcycles sold in India are not subjected to the high tariff imposed by the Indian government.

It is not clear how the U.S. Company is affected by the tariff. It is a possibility that the company is considering the option of importing the US made motorcycles to India in order to improve its revenue and market demand responsiveness. Harley-Davidson's India plant also sells its product in the Asia-Pacific region and is the only manufacturing unit in the region.

Harley-Davidson sold a record 33,000 motorcycle in the Asia-Pacific region last year.

Tariffs on motorcycles across the Asia-Pacific region is not as high as India’s. China and Malaysia has a 30%, Thailand has a 60% tariff and Taiwan has a 20% tariff. While the tariff of the US on motorcycles from India is 0% and for other countries, its range up to 10%.

The U.S. has been fighting against the Indian tariff for years. Earlier in 2007, India had blocked the import of all the full-size motorcycles. Then a deal was signed between the US and India, where India allowed motorcycle imports in exchange for the US agreeing to import Indian mangoes.