NEW DELHI: President Donald Trump's address to a joint session of US Congress unwittingly set the cat among the pigeons closer home, as the needle of suspicion on high import tariffs pointed towards India.
"Currently, when we ship products out of America, many other countries make us pay very high tariffs and taxes. But when foreign companies ship their products into America, we charge them nothing or almost nothing," Trump told congressmen, as he took a swipe on free trade which is skewed against US companies and its workers.
Trump did not name any country. But he referred to Harley-Davidson, which recently took its cult bikes to the White House and even asked Trump to ride it. "I just met with officials and workers from a great American company, Harley-Davidson. In fact, they proudly displayed five of their magnificent motorcycles, made in the USA, on the front lawn of the White House. And they wanted me to ride one, and I said, no, thank you," Trump said in his speech.
At White House, Trump talked shop asking Harley executives on the state of their business. While they said it was good, the President probed further on international sales. "They told me without complaining — because they have been mistreated for so long that they have become used to it — that it is very hard to do business with other countries because they tax our goods at such a high rate. They said that in one case another country taxed their motorcycles at 100%."
That brought India into the picture, as the country levies high duty on automobiles in completely built condition, a policy aimed at promoting local manufacturing, though Indian manufactures said the rates on bikes weren't as high as what Trump referred to.
The President said he was surprised at the tax rate charged. "They weren't even asking for a change — but I am," he told congressmen.
"I believe strongly in free trade, but it also has to be fair trade. It has been a long time since we had fair trade. The first Republican President, Abraham Lincoln, warned that the 'abandonment of the protective policy by the American government will produce want and ruin among our people'. Lincoln was right, and it is time we heeded his advice and his words," he said. "I am not going to let America and its great companies and workers be taken advantage of anymore," Trump declared.
SIAM, India's main lobby group representing the automobile industry, said the taxes weren't as high as what he said. "For the completely built motorcycles above 800 cc, the customs duty is 75% and not 100%. These motorcycles have also been given the advantage of not been tested and homologated in India. Other levies like excise duty equivalent CVD, state vat, road tax, etc., are same as locally produced motorcycles," said Sugato Sen, deputy director-general of SIAM. Harley-Davidson's Indi ..
VG Ramakrishnan, managing partner at consultancy firm Avanteum Partners, said, "Every country levies duties to bring in investments and promote local manufacturing. Duty structures in India are as per global trade rules and uniform for all OEMs irrespective of the country of origin."
Source: The Economic Times