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India Slashes Import Duties on Luxury Goods Amid US Trade Tensions

India Slashes Import Duties on Luxury Goods Amid US Trade Tensions

In its Union Budget 2025-26, India has significantly reduced customs duties on high-end motorcycles, luxury cars, and smartphone components—a move that could benefit American giants like Harley-Davidson, Tesla, and Apple. While US President Donald Trump has frequently criticized India’s high tariffs, Finance Minister Nirmala Sitharaman maintained that the duty cuts aim to strengthen India's manufacturing sector, not signal a response to US trade policies.

Harley-Davidson Set for a Comeback
The import duty on completely built-up (CBU) motorcycles up to 1,600cc has been slashed from 50% to 40%, while semi-knocked down (SKD) kits now attract a 20% duty, down from 25%. Completely knocked down (CKD) units will be taxed at 10%, down from 15%. This makes Harley-Davidson bikes more affordable in India, easing a long-standing trade dispute.

Harley-Davidson entered India in 2010 under the "mangoes for motorcycles" trade deal with the US but exited in 2020. It later returned through a partnership with Hero MotoCorp, which now manufactures and sells the Harley-Davidson X440 in India.

Tesla’s India Prospects Brighten
Luxury cars priced above $40,000 will now face a reduced import duty of 70%, down from 125%. Additionally, lithium-ion battery imports for EVs are now duty-free. These changes may encourage Tesla to set up operations in India, aligning with CEO Elon Musk’s earlier interest in the market.

Apple Benefits from Smartphone Duty Cuts
India has exempted customs duties on 28 mobile phone battery components, lowering smartphone production costs. Apple, which holds a 23% market share in India’s mobile revenue, stands to gain as India strengthens its position as a global manufacturing hub.

Amid Trump's tariff threats, India's strategic duty cuts aim to boost domestic production while mitigating trade disruptions in an unpredictable global market.

India Slashes Import Duties on Luxury Goods Amid US Trade Tensions

India Slashes Import Duties on Luxury Goods Amid US Trade Tensions

In its Union Budget 2025-26, India has significantly reduced customs duties on high-end motorcycles, luxury cars, and smartphone components—a move that could benefit American giants like Harley-Davidson, Tesla, and Apple. While US President Donald Trump has frequently criticized India’s high tariffs, Finance Minister Nirmala Sitharaman maintained that the duty cuts aim to strengthen India's manufacturing sector, not signal a response to US trade policies.

Harley-Davidson Set for a Comeback
The import duty on completely built-up (CBU) motorcycles up to 1,600cc has been slashed from 50% to 40%, while semi-knocked down (SKD) kits now attract a 20% duty, down from 25%. Completely knocked down (CKD) units will be taxed at 10%, down from 15%. This makes Harley-Davidson bikes more affordable in India, easing a long-standing trade dispute.

Harley-Davidson entered India in 2010 under the "mangoes for motorcycles" trade deal with the US but exited in 2020. It later returned through a partnership with Hero MotoCorp, which now manufactures and sells the Harley-Davidson X440 in India.

Tesla’s India Prospects Brighten
Luxury cars priced above $40,000 will now face a reduced import duty of 70%, down from 125%. Additionally, lithium-ion battery imports for EVs are now duty-free. These changes may encourage Tesla to set up operations in India, aligning with CEO Elon Musk’s earlier interest in the market.

Apple Benefits from Smartphone Duty Cuts
India has exempted customs duties on 28 mobile phone battery components, lowering smartphone production costs. Apple, which holds a 23% market share in India’s mobile revenue, stands to gain as India strengthens its position as a global manufacturing hub.

Amid Trump's tariff threats, India's strategic duty cuts aim to boost domestic production while mitigating trade disruptions in an unpredictable global market.

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