New Delhi: Heavy-engine vehicles have been given duty concessions in the interim trade deal between India and the United States. As per the agreement, India will completely eliminate the tax imposed on American Harley-Davidson motorcycles. This means that the premium bikes will now be sold in India without any additional tax. Taxes on high-end cars imported from the US will also be reduced. To recall, these premium cars used to attract heavy duties up to 110 percent, which will now be brought down to 30 percent. It is important to note that this reduction will be implemented gradually over a period of 10 years, ultimately reaching 30 percent.
Here are some of the key details:
- The agreement between India and the US does not offer any special relief for electric vehicles.
- Companies manufacturing electric cars, such as Tesla, will still have to face high taxes in India.
- Tesla owner Elon Musk has previously raised concerns about India’s high import duties.
- This decision is a major setback for Tesla, as the company was hoping to sell its electric cars in India at lower tax rates.
- Tesla began selling its cars in India only last year and had opened its first office in Mumbai.
Musk has been close to Trump
The world’s richest person, Elon Musk, has been quite close to former US President Donald Trump. Last year, during the election campaign, Elon Musk reportedly donated a huge amount to Trump and also actively campaigned for him. After Trump won the election, Musk was frequently seen at the White House.
Donald Trump, after the election win, created a government efficiency department called DOGE to cut US government spending and reduce jobs. Musk was given responsibility for this department. Notably, sales of his company Tesla declined, and its shares crashed massively. Even then, Trump stepped forward to support Musk and bought a new Tesla himself, sending a message to the world encouraging people to buy Tesla cars as well.
Rift Between Trump and Musk:
- Donald Trump’s friendship with Musk did not last long in the second term.
- Musk was suffering losses due to low Tesla sales, and eventually he decided to step away from DOGE.
- Trump introduced a new bill in the US related to taxes and government spending.
- Musk criticized this bill, which did not sit well with Trump.
- In May–June last year, the two exchanged accusations against each other on the social media platform X.
- There were media reports suggesting that Trump was considering selling the Tesla car he had bought earlier, when he was trying to help Musk promote his company.
Agreement focuses on vehicles:
- Taxes on conventional engine cars with an engine capacity of more than 3,000 cc will be reduced gradually.
- This tax will come down to 30 percent over a period of 10 years, according to an official from the Indian government
- Electric vehicles have been kept out of this agreement.
- This makes India’s position different from the agreement it had with the European Union (EU).
- In the agreement with the EU, India had agreed to reduce taxes on several types of vehicles, including some electric vehicles.
- Under that deal, duties could be reduced to as low as 10%.
