Budget 2025: Imported motorcycles to become more affordable in India
What's the story
In a major development, the Indian government has announced a massive reduction in the basic customs duty on imported motorcycles.
The move, announced in today's Union Budget, will apply to complete built units (CBUs), semi-knocked down (SKD) models, and completely knocked down (CKD) vehicles.
The new policy is likely to make premium motorcycle models more affordable for Indian consumers.
Information
New duty rates for motorcycles under 1,600cc
For motorcycles with engine capacity not exceeding 1,600cc, the duty on CBUs has been reduced from 50% to 40%. The duty on SKD units has been lowered from 25% to 20% and CKD units now attract a lower duty of 10%, down from previous 15%.
Bigger cuts
Larger motorcycles see even higher duty reductions
The budget documents also reveal even deeper duty cuts for bigger bikes with an engine capacity of over 1,600cc.
The duty on CBUs for these bikes has been cut down from 50% to 30%.
Meanwhile, SKD units will now attract a reduced duty of 20% as opposed to the previous 25%.
CKD units have also seen a cut in their import duty, now just 10% from 15% previously.
Duty ambiguity
Uncertainty over effective duty rates for cars
While the basic customs duty on the import of cars and other motor vehicles has also been reduced, it remains unclear if their effective duty rates will change.
This is because of the addition of the Agriculture Infrastructure and Development Cess (AIDC) component.
The AIDC was first proposed in a previous Union Budget to enhance agricultural infrastructure, and was first applied on items like gold, silver, alcoholic beverages, and crude palm oil.