Harley-Davidson prices set to crash: Budget 2025 slashes import duties on luxury bikes

In a move that could bolster trade relations with the U.S., India has announced a significant reduction in import duties on high-capacity motorcycles. The decision, unveiled by Finance Minister Nirmala Sitharaman during her Budget presentation on Saturday, is expected to benefit premium bike manufacturers like Harley-Davidson and ease long-standing trade tensions between the two nations.

The revised import duties will see a drop from 50% to 40% for motorcycles with engine capacities of up to 1,600 cc, while bikes exceeding 1,600 cc will enjoy a steeper reduction, with duties falling from 50% to 30%. Additionally, semi-knocked down (SKD) kits will now attract a 20% duty, down from 25%, and completely knocked down (CKD) units will be taxed at 10%, a decrease from the previous 15%.

This policy shift is anticipated to make high-end imported motorcycles more affordable for Indian consumers, potentially boosting sales and expanding market reach for brands like Harley-Davidson. The American motorcycle giant has long been at the centre of trade discussions between India and the US, with President Donald Trump, especially during his first term, repeatedly criticising India’s high tariffs on US-made goods. In December 2024, right after winning the second-term of his presidency, Trump had even threatened retaliatory tariffs, stating, “If they tax us, we tax them the same amount.”

The latest duty cuts are seen as a strategic move to address these concerns and foster smoother trade relations. By lowering the cost of imported bikes, the Indian government aims to not only benefit consumers but also create a more favourable environment for international manufacturers. This could pave the way for increased foreign investment and stronger economic ties between India and the US.

Industry experts predict that the reduced duties will have a ripple effect, making luxury motorcycles more accessible to a broader segment of buyers in India. For Harley-Davidson, this could mean a significant boost in sales and a stronger foothold in one of the world’s largest two-wheeler markets. The move also signals India’s willingness to address trade imbalances and align its policies with global economic expectations.

As the new tax structure takes effect, all eyes will be on how this decision impacts India’s automotive market and its broader trade relationship with the U.S.