(Image source from: wsj.com)

India may cut import duties on Harley-Davidson motorcycles if the United States concurs to regenerate the country's qualification for the Generalized System of Preferences (GSP) that lets market access to about 3,500 products from India at nil or low duties, according to a government official.

The affair is probably to bring forth during trade minister Suresh Prabhu's two-day visit to the U.S., starting Monday.

"We are open to further import duty cut on high-end bikes like Harley-Davidson. But we need assurance that India's market access to the US under GSP will not be curtailed," the government official cited earlier said, requesting anonymity.

In April, the Trump administration said that it was reassessing the GSP eligibility of India, alongside with Indonesia and Kazakhstan.

India has been the ample beneficiary of the GSP programme, exporting goods worth $5.6 billion every year. The regime is keeping a close watch on how the U.S. addresses India's GSP concerns, given that artifacts, engineering, gems and adornment and chemical industries welfare from the scheme.

In response to queries on the U.S. demand for eliminating import duties on Harley Davidson bikes, Prabhu said, "The U.S. is a very important partner for India. Every country has a right to ask for the best deal for itself. If formally asked by the US, we will respond to it as appropriately as possible."

In February, India had decreased customs duty on wholly built units of motorcycles of all engine capacities to 50 percent. Earlier, imports of bikes with engine capacity of 800cc or lower used to draw 60 percent duty, while those with capacities of 800cc, or more, draw 75 percent duty.

Nevertheless, the finance ministry had elevated the customs duty on import of motorcycle elements, such as engine and gearbox, in the entirely knocked down form for local collection to 15 percent from the earlier 10 percent.

The decision resulted in a cost escalation for assembled bikes, affecting some companies, including Harley Davidson.

U.S. President Donald Trump has frequently raised the issue of higher tariffs on Harley-Davidson motorcycles by India and has vulnerable to put a reciprocal tax on Indian bikes, which he has incorrectly claimed to be merchandising "in thousands" in the U.S.

Donald Trump Yet Again Accuses India of Charging 100% Duty on Imports

During a recent discussion with members of the US Congress, Trump had said that the decision of the Indian government to reduce the tariff on Harley-Davidson motorcycles from 75 percent to 50 percent was not enough, and had asked that it should be reciprocal, as the US imposes "zero tax" on the import of Indian motorcycles.

By Sowmya Sangam