TL;DR
India-US trade pact eliminates import duties on large Harley-Davidson motorcycles and reduces tariffs on high-end US cars, but specifically excludes electric vehicles from concessions.
In a significant development for the automotive sector, India and the United States have formalized an interim trade pact that will see the elimination of import duties on fully-built Harley-Davidson motorcycles with engine capacities exceeding 800cc, up to 1600cc. This move aims to reduce the price of these premium American bikes, which currently face substantial import duties of around 44% comprising basic customs duty and social welfare surcharge. The decision is seen as an effort to address long-standing concerns from the US regarding high tariffs on its goods entering the Indian market.
However, the agreement explicitly excludes electric vehicles (EVs) from these tariff concessions, thereby shutting the door on a potential lower-tariff entry route for companies like Tesla. This exclusion contrasts with India's broader automotive access offered to the European Union, which includes steeper tariff cuts and eventual concessions on some electric vehicles. Furthermore, under the new trade deal, tariffs on high-end American cars with engine capacities above 3,000cc are also slated for a gradual reduction to 30% over a period of ten years, signaling a strategic realignment in India's import duty structure for certain luxury automotive segments.
