What Happened
- The India-US interim trade framework announced on 7 February 2026 grants zero-duty access for US motorcycles in the 800cc to 1,600cc segment and above, directly benefiting Harley-Davidson.
- India previously reduced import duties on motorcycles up to 1,600cc from 50% to 40%, but the new framework fully eliminates duties for qualifying US bikes in this premium segment.
- Harley-Davidson had exited India in September 2020 after a decade of operations, citing sluggish demand, and closed its CKD assembly plant at Bawal, Haryana.
- Since 2020, Hero MotoCorp has been marketing and selling Harley-Davidson products in India through a distribution partnership.
- Harley sold only 97 premium motorcycles in India in 2025, highlighting the niche nature of the market. The broader 800cc+ segment is very small in a country that sells millions of sub-500cc units annually.
- The deal also reduces tariffs on high-end American combustion engine cars (above 3,000cc) from approximately 110% to 30%, phased gradually over 10 years. Electric vehicles are explicitly excluded.
Static Topic Bridges
India's Automobile Import Tariff Structure
India maintains among the highest automobile import duties globally, designed to promote domestic manufacturing under the "Make in India" framework. The tariff structure is tiered based on engine capacity and vehicle type, with Completely Built Units (CBUs) facing higher duties than Completely Knocked Down (CKD) kits assembled domestically.
- CBU car import duty: 60-100% (depending on engine size and CIF value)
- CKD car import duty: 15-30%
- Motorcycle CBU import duty (pre-deal): 40-50% (previously up to 75-100% before 2018 reduction)
- India's auto industry contributes approximately 7.1% to GDP and employs about 37 million people
- National Automobile Scrappage Policy (2021) aims to phase out old vehicles and stimulate new purchases
- India is the world's third-largest automobile market by volume (primarily two-wheelers and small cars)
Connection to this news: The zero-duty access for 800cc+ US motorcycles represents a departure from India's protectionist auto tariff regime. However, the impact is contained because the premium motorcycle segment is a negligible share of India's total two-wheeler market (over 18 million units annually), and the concession addresses a long-standing Trump administration demand without threatening domestic manufacturers.
Harley-Davidson as a Symbol in India-US Trade Diplomacy
Harley-Davidson motorcycles became an outsized symbol of India-US tariff disputes under President Trump, who repeatedly cited India's high motorcycle duties as emblematic of unfair trade practices. In 2007, a trade arrangement exchanged Harley-Davidson market access for Indian mango exports to the US, illustrating how specific products can become diplomatic instruments in bilateral relations.
- 2007: US-India agreement linked Harley-Davidson market access to Indian mango export clearance
- 2009: Harley-Davidson established India subsidiary in Gurgaon
- 2011: CKD assembly plant opened at Bawal, Haryana (only second CKD facility outside the US at the time)
- 2018: India cut motorcycle import duty from 75-100% to 50% under Trump administration pressure
- 2020: Harley exited India, closing Bawal plant; total sales over a decade: approximately 27,000 units
- 2020 onwards: Hero MotoCorp distributes Harley-Davidson products in India
- Trump repeatedly stated that "India killed Harley-Davidson with tariffs"
Connection to this news: The zero-duty concession on premium US motorcycles is as much a diplomatic gesture as an economic policy measure. By removing the tariff irritant that Trump personally championed, India secures broader benefits in the trade deal (including the lower 18% reciprocal tariff) at minimal cost to domestic industry.
India's Two-Wheeler Industry and Market Structure
India is the world's largest two-wheeler market, with annual production exceeding 18-20 million units. The industry is dominated by domestic manufacturers and is heavily concentrated in the sub-500cc segment. The premium motorcycle segment (above 500cc) constitutes less than 1% of total sales volume.
- Annual two-wheeler production: approximately 18-20 million units
- Market leaders: Hero MotoCorp (~35% share), Honda (~25%), TVS Motor (~15%), Bajaj Auto (~12%)
- Premium segment (500cc+): Royal Enfield dominates with over 90% share; total premium segment is less than 1% of volume
- Two-wheeler exports (FY 2024-25): approximately 3.5-4 million units
- Electric two-wheelers growing rapidly: approximately 1 million units sold in FY 2024-25
- PLI Scheme for automobile and auto components: Rs 25,938 crore outlay to boost domestic manufacturing
Connection to this news: The zero-duty access for 800cc+ US motorcycles has negligible impact on India's two-wheeler industry because the premium heavy cruiser segment where Harley operates is tiny compared to the mass-market dominated by Hero, Honda, and Bajaj. Royal Enfield (in the 350-650cc segment) may face marginal competitive pressure but operates in a different price-performance bracket.
Key Facts & Data
- Harley-Davidson import duty: reduced to zero for 800cc-1,600cc+ US motorcycles
- Previous duty: 40-50% on CBU motorcycles
- Harley-Davidson India sales in 2025: 97 units
- Total Harley sales during decade in India (2010-2020): approximately 27,000 units
- India's two-wheeler market: 18-20 million units annually (world's largest)
- Premium segment (500cc+): less than 1% of total market volume
- High-end US car tariff reduction: 110% to 30%, phased over 10 years
- Electric vehicles: explicitly excluded from the trade deal
- US reciprocal tariff on India: reduced from 25% to 18%