India-US Trade Deal: Zero Duties On Big Bikes To Benefit Harley-Davidson, EVs Excluded

India and the United States have finalised an interim trade framework, easing pressure on Indian exporters. The agreement is expected to have a positive impact on the Indian auto industry, giving the exporters a breathing room after a period of high import duties. Simultaneously, the trade deal will result in reduced duties on imported vehicles, including motorcycles and cars.

Government sources have revealed that under the terms of the agreement, big motorcycles will have zero import duties. Specifically, big bikes with engine capacity ranging between 800 and 1600 cc will immediately have zero duties. This move targets premium models like those from Harley-Davidson and Indian, aiming to boost bilateral trade while protecting key domestic sectors.

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For internal combustion engine (ICE) cars exceeding 3000 cc engine capacity, tariffs will drop to 30 percent over a 10-year period. This gradual reduction applies specifically to high-end luxury imports, providing measured market access without disrupting local manufacturers.

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The policy excludes electric vehicles (EVs) entirely from these concessions. The move seeks to shield India's growing EV ecosystem, including investments under the Production-Linked Incentive (PLI) scheme, from foreign competition. Presently, the country has multiple domestic automakers investing in the expansion of electric vehicles in their respective segments.

Implications For Automotive Market

Premium bike enthusiasts stand to gain most immediately, as zero duties from day one could lower prices for models like Harley-Davidson variants in the specified cc bracket. Similarly, for luxury car buyers, the 10-year path to 30 percent offers predictability, potentially spurring imports of high-cc ICE vehicles while quotas may limit volumes.

Meanwhile, Tesla, the US-based electric vehicle manufacturer, will remain isolated from the benefits of trade deals because of the exclusion of EVs. In other words, the Tesla Model Y currently on sale in India will continue to face steep tariffs. On the other side, Indian EV makers like Tata and Mahindra benefit from the exclusion, aligning with national goals for self-reliance in green mobility.