India-US Trade Deal: Tariff cut for Harley-Davidson! Tesla left without relief - All you need to know

India’s proposed interim trade agreement with the United States is set to ease access for American luxury vehicles and motorcycles, offering major relief to brands like Harley-Davidson, while keeping the door firmly shut for electric vehicle makers such as Tesla.

Under the framework, India plans to sharply reduce import duties on high-end American cars and completely remove tariffs on Harley-Davidson motorcycles. An Indian government official familiar with the talks said duties on premium internal-combustion engine cars will be brought down to 30 percent from levels that currently go as high as 110 per cent. However, no similar concessions are being extended to electric vehicles, a decision that effectively excludes Tesla from the deal’s benefits.

The move follows the release of an interim trade framework between New Delhi and Washington last week. The development comes days after US President Donald Trump indicated that tariffs on Indian exports could be reduced to 18 per cent from 50 per cent, provided India scales back purchases of Russian oil.

According to the official, vehicles powered by conventional engines with capacity above three thousand cubic centimetres will see a gradual reduction in duties over a ten-year period, eventually settling at 30 per cent. In contrast, electric vehicles have been deliberately kept outside the pact, despite repeated calls from Tesla chief Elon Musk for lower import duties in India.

Tesla has long argued that India’s steep tariff structure makes it difficult to test the market before committing to local manufacturing. By excluding EVs from the agreement, India has made it clear that it is not ready to offer a low-tariff entry route for foreign electric carmakers.

Interestingly, India’s position with the US differs from its talks with the European Union. In negotiations with the EU, New Delhi has signalled deeper tariff cuts, potentially lowering duties to as little as 10 per cent across a wider category of vehicles, including limited concessions for electric models over time.

India, the world’s third-largest automobile market after the United States and China, has traditionally shielded its domestic auto sector with heavy import duties ranging between 70 per cent and 110 per cent. While imports of US cars remain limited, premium motorcycles such as Harley-Davidsons already find buyers in the country and will now benefit further under the new framework.

The official added that other high-end American bikes would also see duty reductions. The tariff changes are expected to take effect once both countries formally sign the agreement, likely in March, although full details of the pact are yet to be publicly released.

India’s commerce ministry has not issued an official statement on the matter so far.