India has made significant cuts to customs duties on high-end motorcycles, cars, and smartphone parts as part of its Union Budget for 2025-26. This decision comes amid heightened trade tensions, especially after US President Donald Trump recently criticized India’s tariff policies, calling the country a “tremendous tariff maker.”
This new changes was announced by the Finance Minister Nirmala Sitharaman, highlighting that the reduction in the import duties is on high-end motorcycles with engine capacities of up to 1,600 cc previously taxed at 50% will now face a 40% duty when imported as completerly built-up (CBU) units.
Additionally, duties on semi-knocked down (SKD) kits have been cut from 25% to 20%, and completely knocked down (CKD) units will be taxed 10%, down from 15%.
These changes are expected to make imports of iconic Harley-Davidson motorcycles and other premium vehicles more affordable in India. High tariffs on such imports have long been a contentious issue between India and the United States, and this move could signal an effort to address those concerns.
Despite the timing of these cuts, Sitharaman clarified that the reductions were made as part of India’s larger plan to strengthen its domestic manufacturing capabilities. She emphasized that the goal was to make India a self-reliant (aatmanirbhar) manufacturing hub and was not a direct response to President Trump’s tariff remarks.
Harley-Davidson first entered India in 2010 as part of the “mangoes for motorcycles” deal signed with the US in 2007. However, the brand exited the market in September 2020, only to return a month later through a non-equity partnership with Hero MotoCorp, which now manufactures and sells the Harley-Davidson 440X, the brand’s smallest bike.
Another major move is the removal of import duties on lithium-ion batteries for electric vehicles, which could encourage Tesla to expand into India.
Additionally, duties on 28 mobile phone battery components—imported from countries like the US and China—have been exempted, a decision that will reduce smartphone costs and support India’s growing mobile manufacturing sector.