India, US trade deal is key to Trump’s economic agenda as well

Donald Trump's push to boost American production and exports, ToI reported. However, across-the-board duty reductions may not necessarily translate into higher US shipments to India, as companies are likely to source goods from more competitive markets like China or Southeast Asia.

Despite the tariff debates, American brands such as Harley-Davidson and Tesla do not currently manufacture vehicles in the US for export to India. Harley-Davidson, a brand often associated with US presidents, imports its motorcycles from Thailand, while Tesla—on the verge of entering the Indian market—plans to ship its electric vehicles from Germany after Indian authorities discouraged imports from China.

Locational advantages, lower freight costs, and economies of scale make it more profitable for companies to manufacture in other countries rather than the US. Many firms also take advantage of India's free trade agreements to ship goods at zero duty.

«For all the noise, Harley, which only makes the 440cc model in India in partnership with Hero Moto, is still relying on Thailand for its larger models,» a foreign trade analyst told ToI. «The company uses its mega set-up in Thailand to ship models like Pan America, Nightster, Street Glide, and Fat Bob to India.»

Even if India were to reduce import duties on US-made motorcycles to zero, Harley-Davidson would still benefit from sourcing them from Thailand due to lower freight costs and faster shipments, another analyst pointed out.

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