'Daunting trade barriers' keep Harley away from India

NEW DELHI: Days after the Centre relaxed emission norms for foreign motorcycle companies, American cult bike maker Harley-Davidson on Tuesday accused India of maintaining "daunting trade barriers" in the form of high duties to keep it away.

In an e-mailed interview, Harley Davidson Motor Co (HDMC) Vice-President, Government Affairs, Tim Hoelter, said that besides the emission norms, there was a far more "daunting trade barrier" facing the company in India that it hope could be addressed.

"Presently, India maintains a 60 per cent rate of duty on heavyweight motorcycles. This extraordinary tariff rate when coupled with taxes of 30 per cent would double the price of a Harley-Davidson motorcycle in India, were we to enter the market," he said.

Questioning the rationale behind India's high duty on heavyweight motorcycles, he said such a norm was to prevent companies like HDMC from entering the market.

"Frankly, we do not understand why India maintains a 60 per cent duty on heavyweight motorcycles when the average industrial tariff rate in India is only around 10 per cent," he said.

The practical effect of such an "extraordinarily" high rate of duty is to dissuade firms like Harley-Davidson from entering the market and of course prevent the government from earning any tariff revenue whatsoever, he added.

Last month, New Delhi and Washington reached an agreement whereby the US eased phyto-sanitary norms for the Indian mangoes while India harmonised emission norms on bikes above 800cc with Euro III standards, paving way for import of Harley-Davidsons.

 Hoelter said if the company were to bring its bikes in India, the price would be too much to expect the Indian consumer to pay to "participate in the Harley-Davidson Experience".
 
 By all estimates, under the current duty structure an imported Harley Davidson bike in India will not come for less than Rs 5 lakh.
 
Hoelter said while the company believed it could help build a leisure market for motorcycling within India, where none exits presently but "now does not seem like the right time for the reason mentioned above".

Seeking to allay fears of competition to domestic players in the Indian market, Hoelter said Harley-Davidson and other heavyweight motorcycles were very different from two-wheelers ridden on the country's streets and roads.

"India's two-wheelers are designed and used for commuting and other basic transportation needs. In contrast, Harleys are designed and ridden for recreation and long distance touring.

As such, our motorcycles do not compete with those two-wheelers manufactured by the domestic industry," he said.

He also maintained that the company's heavyweight motorcycles complied with advanced Euro-III standards, with which the Indian Government has agreed to harmonise its regulations with.