NEW DELHI: A fleet of Harley-Davidsons led his inauguration parade in Washington DC this January. So it’s only natural that US President Barack Obama wants to do his bit for the iconic American bike that’s going through a rough patch. As Harley prepares for its India debut in 2010, the Obama administration is set to take up the issue of lowering import duties again with the Indian government.
Harley-Davidson got access to India two years ago, thanks to lobbying by the Bush administration, which allowed Indian mangoes into the US as a quid pro quo. Now the US has informed India that the issue of duties will be on top of its agenda during the trade forum meeting next month. The country will be led by its trade representative Ron Kirk.
“The US department of commerce has already discussed the issue informally with us and US officials will discuss it extensively at the trade policy forum meeting in October,” a commerce department official, who did not wish to be named, told ET.
Harley-Davidson motorcycles are to be sold in India through a wholly-owned subsidiary of the company. According to the official, the US government wants to ensure they are priced as competitively as possible by urging India to bring down Customs duties. Import duties on completely-built units (CBUs) is 60%, in addition to 30% local taxes. With the existing duties, the market price of Harley-Davidson bikes is expected to range between Rs 6 lakh and Rs 14 lakh.
When agreeing to allow Harley-Davidsons into the country in 2007, India had said a categorical no to lowering duties. Things are, however, a little different now. “India’s position on the issue would also depend on what else is on the table. Things would unfold once the trade policy forum discussions take place,” the official says.
The Milwaukee-based company, which announced in September that in addition to 1,000 job cuts, there will be layoffs in southeastern Wisconsin and a two-month holiday shutdown at its Buell motorbike plant in East Troy, is banking a lot on India. It hopes the country will overtake Japan—where it sold 14,654 bikes last year—and emerge as its biggest market in Asia in the next decade.
Source : The Economic Times