New Delhi: India has significantly reduced import duties on high-end motorcycles, luxury cars, and smartphone components in its Union Budget 2025-26. The move benefits major American brands like Harley-Davidson, Tesla, and Apple, aligning with India’s goal of strengthening its economy and manufacturing sector.
However, Finance Minister Nirmala Sitharaman clarified that the decision was based on India’s economic priorities rather than a response to US President Donald Trump’s tariff policies.
“We are focusing on making India a global manufacturing hub,” Sitharaman stated in an exclusive interview with NDTV.
Harley-Davidson Motorcycles to Get Cheaper in India
The revised tariff structure brings significant relief for premium motorcycle brands. Import duty on fully built-up (CBU) motorcycles with an engine capacity of up to 1,600cc has been slashed from 50% to 40%.
Similarly, semi-knocked-down (SKD) kits will now attract a 20% duty instead of 25%, and completely knocked-down (CKD) units will be taxed at 10%, down from 15%.
Harley-Davidson, which exited India in 2020 but later returned through a partnership with Hero MotoCorp, stands to benefit significantly. The price reduction is expected to boost sales of models like the Harley-Davidson 440X, a popular choice in the Indian market.
During his first term, Trump had criticized India’s 50% import duty on Harley-Davidson bikes, calling it “unacceptable.”
India Opens Doors for Tesla?
In a major incentive for electric vehicle manufacturers, India has reduced import duty on luxury cars priced above $40,000 from 125% to 70%. Additionally, basic customs duty on lithium-ion batteries used in EVs has been scrapped entirely.
This move could be an attractive opportunity for Tesla, which has been eyeing the Indian market. In April 2024, Tesla CEO Elon Musk had planned to visit India and meet PM Modi, fueling speculation about a potential investment.
Apple Gains from Smartphone Tariff Cuts
India’s push for mobile manufacturing continues, with 28 key components for battery production being exempted from customs duties. This is expected to lower the cost of smartphones and accessories while strengthening domestic production.
Apple, which holds a 23% revenue share in the Indian smartphone market, is likely to benefit significantly. The move also aligns with India’s ambition to become the world’s second-largest mobile phone manufacturer.
India’s Trade Strategy Amid Trump’s Tariff Threats
President Trump has repeatedly criticized India for imposing high tariffs on foreign goods and has threatened to impose 100% tariffs on BRICS nations, including India.
By reducing import duties, India is not only seeking to attract global businesses but also positioning itself as a key player in global supply chains. The decision could help India navigate US-China trade tensions while securing a stronger foothold in international markets.
According to trade experts, India’s tariff rationalization is a strategic move to enhance economic resilience amid an unpredictable global trade landscape.