Could India-USA Trade Standoff Affect Cars: Opinion

India is all set to increase import duties on motorbikes imported from the United States. This will affect the likes of Harley-Davidson and more importantly, Indian Motorcycles. While Harley Davidson is the one most talked about though, mainly due to certain comments made by the United States President - Donald Trump, two-wheelers aren't the only automotive imports from the Unites States in terms of Completely Built Units or CBUs. Both Ford and Jeep also import their flagship products to India from the United States and both these automakers could be affected if the stand-off between the two countries resulting from President Trump's policies continues and extends to cars too.

Also Read: India To Hike Import Duty On US-Made Motorcycles

After General Motors' bowing out of the Indian market, the only two American (4-wheeler) automakers that continue to do business in India are Ford and Jeep. Ford imports the Mustang to India, which is the country's only muscle car sold today. The Mustang sells like hot cakes not because of its V8 engine or unlimited tuning and modification potential but because of the fact that it is priced at Rs. 75 lakh (ex-showroom) making it a good proposition for most buyers looking for a 'sports' car or coupe in India. With over 450 bhp on tap, the Mustang offers a great alternative to buyers looking to buy the likes of a traditional luxury + performance car like the Mercedes-AMG C43 or maybe a Porsche Boxster. In the United Kingdom, also a right hand drive market, the same Ford Mustang costs about £40,000 or about Rs. 36 lakh, a whopping Rs. 40 lakh cheaper than the same car that is available in India. While the difference in pricing is due to the heavy taxation on imported cars in India, the increase in taxes on USA origin products could push the price up even higher - precariously close to the Rs. 1 Crore range making it an absolutely ridiculous buy for that sort of money.

Also Read: Indian Government To Ease Import Regulations For Premium Cars, Motorcycles And EVs

And the same would apply to the likes of the Jeep range of SUVs with the exception of the 'Made in India' Compass. The Grand Cherokee SUVs are already priced at a premium over their direct competition due to high taxes and an increase in tax for these SUVs would make them very uncompetitive in the Indian market. What could be hit even worse though would be the new Wrangler that is expected to make it to India this year. As the best Wrangler ever made, the new car is more luxurious, better equipped and much better looking than the outgoing model. If taxes are increased even further, Jeep could reconsider launching the car in India too.

Also Read: Harley-Davidson India Says Import Duty Cut Will Not Have Significant Impact

Now, most would argue that both these cases are too small to matter and too elite to affect the masses. While that might technically be true and while the actual mass market products both these companies make are manufactured in India and even exported to a whole host of countries, to increase taxes on their flagship products as a tit-for-tat response is unfair to those who are actually interested in buying them. In any case, us Indian consumers pay a disproportionate amount of tax on most with no real infrastructural improvements to show for it and an additional tax due to a fight of egos ais the last thing the already stretched Indian automotive industry needs.