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Old 07-22-2006, 08:35 AM   #1
ScooterTrash's Avatar
Join Date: May 2005
Location: Cut n Shoot
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lots of em

Harley in India

Harley Davidson revving up for India

NEW DELHI: Guess who’s championing Harley Davidson — the iconic American motorcycle brand — in India? No need to think too hard; it’s none other than the US government.

Uncle Sam has sought import duty reduction and easier emission standards for the popular bike, which enjoys cult status in the US and many other parts of the world.

Officials of the US administration have been making a ‘dhoom, dhoom’ push for Harley Davidson, while the mobike company has made a presentation to the Indian authorities. The two sides discussed the issue via a digital video-conference, highly-placed government sources said.

The interesting aspect that has come out of the consultations is that Harley Davidson was finding it difficult to meet the stringent emission standards set by the Indian government. The US side has sought a different set of emission standards for large motorcycles as compared to the smaller bikes manufactured in India.

While Harley Davidson is keen to export 500cc mobikes to India, the popular products in India are of much smaller capacity.

To ally the apprehensions of Indian mobike manufacturers, the American side has said that Harley’s 500cc bikes will not compete with Indian motorcycles. In fact it will compete with the smaller cars, the company and the US government representatives have said.

A Harley Davidson bike of 500cc would cost between Ride Smart 2 lakh to Ride Smart 3 lakh, bringing it on par with a small car in terms of price. The US side has also argued that the market for large bikes in India is limited and the potential could be tapped only if import tariff is reduced. As of now, basic customs duty on bikes is 60%.

After loading on countervailing duty of 16%, 4% special additional duty of customs and education cess, the effective duty leads to doubling of the price in terms of landed cost.

Therefore, Harley Davidson wants a lower duty on its products in India. “Considering price and restrictions on use in terms of road and traffic conditions, only a few hundred bikes (of 500cc) could be sold in India,” is the argument of the American side.

While the Indian side is still weighing the American proposal, officials have asked for a detailed paper covering all aspects of the issue. They have tried to explain that the stringent emission norms are due to the large proportion of two-wheelers in the population of Indian automobiles.

Nearly 80% of the automobiles in Indian cities comprise two-wheelers and it is necessary to control their emission in a stringent manner it has been said.

It is understood that the Indian auto industry would also be consulted before taking a decision on Harley Davidson’s proposal. While Euro III norms may be accepted for the legendary bike — putting it on par with cars — as a concession, any reduction in import duty seems unlikely now.

On the customs duty front, only a quid-pro-quo deal on any other trade issue would lead to conceding of Harley Davidson’s demand, the sources said.
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