Harley Davidson a threat to Donald Trump-Narendra Modi bonhomie?

NEW DELHI: Legendary American motorcycle, Harley-Davidson, could end up becoming a sticking point between US President Donald Trump and Prime Minister Narendra Modi.

Peter Navarro, director of White House National Trade Council, said in a letter to the editor of The Wall Street Journal that if India lowers the 100 per cent tariffs it imposes on the popular American Harley Davidson motorcycles, it could result in more foreign investments in the country.

"If India agrees to lower its tariffs on Harley Davidson motorcycles, Indian consumers will buy more Harleys and save less while Harley will sell more Harleys and invest more," he said. He wrote the letter in response to the debate that his op-ed piece on March 6 in the daily had generated.

In his first speech to the Congress, US president Donald Trump had raised the issue without naming India. "American companies are taxed at one of the highest rates anywhere in the world. My economic team is developing historic tax reform that will reduce the tax rates on our companies so they can compete and thrive anywhere and with anyone," Trump had said in his speech.

After meeting workers and officials of Harley-Davidson, Trump said they weren't even complaining when asked about their international sales and that they had been so mistreated for so long that they had become used to it.

"They said that in the case of 'another' country, they tax their motorcycles at 100 per cent. They weren't asking for a change but I am," Trump said, most likely referring to India.

However, India has not singled out Harley-Davidson for high tariff. It imposes 100 per cent tariff on all motorcycles with engines bigger than 800cc. High tariffs on imports are imposed to encourage local manufacturing. The US too imposes prohibitively high tarfiis on several items exported from India.