- India-US interim trade deal to cut duties on American cars and bikes over 10 years
- Duties on cars above 3,000cc petrol and 2,500cc diesel to drop from 110% to 30%
- Harley Davidson and Indian Motorcycle bikes will see duties cut to zero by March 2026
With India and US finalising an interim bilateral trade agreement (BTA), prices of several premium American cars and motorcycles are set to drop sharply. Famous American car brands like Ford, General Motors (GM) and Stellantis will see a sharp duty reduction from 110% to 30% over the period of 10 years.
As per the proposal, India will reduce duty on cars above 3,000cc (petrol) and 2,500cc (diesel) engines. This will be applicable only on completely built units (CBU).
On the other hand, bikes from Harley Davidson and Indian Motorcycle will be the biggest beneficiaries. Currently India levies 30-40% duty on Harley Davidson bikes, which are set to drop to zero from mid March 2026. Just like American cars, this duty cut will be applicable only on CBU bikes. India is set to cut duty on bikes between 800 cc engines to 1600 cc engines. However the bikes above 1600 cc engine will attract 30% duty.
Legacy American brands like Ford, GM and Stellantis will be the biggest beneficiaries. While both Ford and GM exited the Indian market, Stellantis sells cars in India under the Jeep brand. However, it will not impact the currently sold Jeep cars in India as the models have lighter engines. Ford, GM and Stellantis cars are set to get cheaper by at least Rs 20 lakhs.
To name a few, Ford Mustang GT, Ford Endeavour, Ford F-150 Raptor and Ford Explorer are set to see price reduction. GM's Chevrolet Corvette C8, Chevrolet Tahoe and Cadillac Escalade will also see price reduction. Similarly, Stellantis brand's Jeep's Cherokee, Wrangler Rubicon are to see a price reduction.
For bikes, Harley Davidson, Indian Motorcycle are set to get cheaper by at least Rs 3 lakhs. To name a few, Harley Davidson Nightster, Sportster, Pan America will see massive price drop. Even for Indian Motorcycle Scout Sixty, Scout Bobber Sixty FTR, there will be a massive price drop.
ICRA Limited's Vice President & Sector Head of Corporate Ratings Rohan Kanwar Gupta told NDTV Profit, "The India-US BTA is unlikely to materially impact the overall automotive industry volumes. In the passenger vehicle industry, demand is largely concentrated in lower engine capacities (below 1,200cc petrol and 1,500cc diesel) and is largely met through domestic production (with imports remaining restricted to high end cars)."
"As a result, the BTA is unlikely to have a material impact on the overall industry prospects. In two-wheeler industry as well, the 800cc-1,600cc segment is niche (with relatively low volumes); accordingly, reduction in duty for high end motorcycles would primarily impact the premium motorcycle segment and have minimal impact on overall industry volumes."
Auto experts believe that the recently signed BTA between India and US will hardly have any impact on the Indian industry. While importers of such cars will see benefits due to price drop, the Indian auto industry will face no problem.
Arun Kumar Malhotra, Former MD of Nissan India and Auto Expert told NDTV Profit that premium cars and bikes segment in India in niche which is already dominated by European players.
He said, "There's hardly going to be any impact on the Indian auto industry. The only brand that we will see the highest benefit will be Harley Davidson. In fact for such category bikes, there is a very minuscule market "
He added, "Indian brands like Royal Enfield, Bajaj have enough demand for the categories that the companies are present in which is different from products of American companies."
He also said that the luxury car market, is majorly dominated by BMW, Audi, Mercedes, "Then there's the mid car segment which Indian companies have a great portfolio. So frankly, the brand which we're talking of (Ford, GM, Stellantis), they won't have much of the models fitting in the segment."
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