The government announced a reduction in basic customs duty on the import of motorcycles, including complete built units (CBUs), semi-knocked down (SKD) and completely knocked down (CKD) units, in the Union Budget. 

2025 Budget: Big bikes to become more affordable

For motorcycles with engine capacity not exceeding 1,600cc, the duty on CBUs has been reduced from 50 percent to 40 percent. Duty on SKD units has decreased from 25 percent to 20 percent and those of CKD units have been reduced 5 percent from from 15 percent.

For larger motorcycles with engine capacity exceeding 1,600cc, the duty reduction on CBUs are higher: from 50 percent to 30 percent. Duty on SKD units will reduce from 25 percent to 20 percent, and those of CKD units from 15 percent to 10 percent.

Though basic customs duty on the import of cars and other motor vehicles has also been reduced, it is not clear whether their effective duty rates will change. This is because the budget document shows an addition of the Agriculture Infrastructure and Development Cess (AIDC) components on these vehicles. AIDC was first proposed in the Union Budget a few years back to improve agricultural infrastructure. On the customs side, AIDC was initially applied to items such as gold, silver, alcoholic beverages and crude palm oil.

The reduction in the duty on imported motorcycles will invariably reduce the cost of those models in India, which has witnessed a shift in preference towards premium models.

The duty cut in motorcycles comes at a time when Donald Trump is the president of the United States again. A few years back, Trump had criticised India for higher tariffs with duty on Harley-Davidson motorcycles as a reference point.