The India-USA free trade agreement could have an impact on the automotive sector as early as March 2026. The two countries are set to sign an interim agreement ahead of the FTA coming into effect, which will reduce excise duties on select US motorcycles currently being imported into the Indian market.
Also read: India-EU FTA Finalised; Duty On Imported Cars To Drop To 10%
As per reports, the interim agreement will reduce excise duties on CBU motorcycles with engine capacities in the 800 cc to 1600 cc range from the existing 40 per cent to zero. The biggest beneficiary from this agreement is expected to be Harley-Davidson, whose select models sit within the range.
The American motorcycle manufacturer currently imports motorcycles with engine capacities ranging from around 1200 cc to 1900 cc. The company is also currently in a partnership with Hero MotoCorp under which it retails a 440 cc locally produced motorcycle – the X440 T.
Also read: India-EU Trade Deal: List Of Cars Likely To Get More Affordable In India
Based on the agreement’s details, the primary beneficiaries of the interim deal will be the Harley-Davidson Sportster and Nightster series, as well as the Pan America ADV.
Another brand that could benefit under the agreement could be fellow American motorcycle maker Indian Motorcycles. The company also offers models such as the Scout that fall within the 800 to 1600 cc category.
Benefits For Four Wheelers
The reports also state that excise benefits for four-wheelers are also set to be rolled out as part of the interim agreement. This is said to primarily affect models with engine capacities of over 2500 cc for diesel and 3000 cc for petrol engines. This could affect some high-end CBU import models currently imported from the USA by European carmakers, as well as open the doors for brands such as Jeep to offer more powerful engine options for their range of SUVs in India.
This could also open the doors for brands such as Ford to make its long-touted comeback into the Indian market with models from its global catalogue.