India considers lower tariffs on Harley bikes, US liquor to boost trade relations: Sources

India is in talks with the United States to further reduce import duties on Harley-Davidson motorcycles, Bourbon whiskey, and Californian wine as part of efforts to enhance trade relations. Sources indicate that both nations are engaged in discussions to ease tariffs on select goods, making them more affordable in India while also addressing broader trade concerns.

The government has already taken steps to lower import duties on these premium products in the past. In a previous reduction, tariffs on Harley-Davidson motorcycles were brought down from 50% to 40%. Similarly, import duties on Bourbon whiskey were cut from 150% to 100%. Now, officials are considering further cuts, which could make these luxury items even more competitive in the Indian market. The US, on the other hand, is pushing for greater market access for its Californian wines, a product that has seen increasing demand in India’s high-end liquor segment.

The ongoing trade negotiations extend beyond motorcycles and alcoholic beverages. The US is also advocating for better terms for its pharmaceutical and chemical exports to India. In response, India is seeking concessions on its own exports to the US, particularly in sectors where Indian businesses are looking to expand their footprint. Given India's growing role in global pharmaceutical production, any new agreements in this sector could have wide-reaching effects on both markets.

Trade data from recent years highlights fluctuations in India’s pharmaceutical imports from the US. In 2020-21, imports were valued at ₹2,26,728.33 lakh, which surged by nearly 79% to ₹4,05,317.35 lakh in 2021-22. However, a sharp decline followed in 2022-23, with imports dropping to ₹2,93,642.57 lakh, before rebounding by 10.8% in 2023 to ₹3,25,500.17 lakh. These figures indicate the volatility in trade flows between the two nations and underscore the importance of ongoing negotiations.

If the proposed tariff reductions are implemented, Harley-Davidson motorcycles may become significantly more affordable for Indian buyers, potentially increasing sales of these high-end bikes in India. Similarly, lower duties on Bourbon whiskey and Californian wine could enhance their competitiveness against domestic and other imported brands, further diversifying India’s liquor market.

While the talks could result in lower prices for consumers, they may also impact domestic manufacturers in both countries. Indian drug makers, for instance, are closely monitoring the discussions, as increased pharmaceutical imports from the US could create tougher competition in the generics market. As trade negotiations progress, businesses and policymakers on both sides will be weighing the benefits of reduced tariffs against potential disruptions in domestic industries.