Tariff - The Harley deal was crafted by a mangoes-for-bikes...

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Harley tax sours US mango bite New Delhi, Oct. 26 2009 Having swallowed the juicy Indian mango, the Americans are finding it hard to digest the duty on Harley-Davidson bikes. US trade representative Ron Kirk today complained about the Indian government’s refusal to lower duties on the chopper — as Harley fans call the bike — for which a buyer here has to pay as much as 104 per cent tax. “Till date, not a single Harley Davidson has sold in India,” Kirk said in New Delhi, though the Wisconsin-based bike maker is expected to open a showroom in India next year. The bike was launched in India in August but formal retail sales have not begun yet. Kirk, picked by President Barack Obama to prise open markets for American goods in the middle of a recession, did not hide his disappointment. “When the US opened its markets to Indian mangoes, we had hoped that US-made Harley- Davidsons would be allowed into Indian markets,” Kirk said, referring to the steep duty, not permission as such, which had been granted by India.
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Unformatted text preview: The Harley deal was crafted by a mangoes-for-bikes diplomatic overture with the US. The Foreign Investment Promotion Board (FIPB) had cleared Harley’s investment proposal in April 2007 and the US government lifted an 18-year ban on mango imports from India as a quid pro quo. The completely built units of Harley will attract a 60 per cent import duty. Local taxes will push the total levy to around 104 per cent, making the iconic bike cost between Rs 6 lakh and Rs 15 lakh. But Indian officials discounted the possibility of an immediate cut in duty for one motorcycle brand. “When duties come up for review next year, we will see,” an official said. India and the US have had differences over America’s demand for reducing tariff on a host of farm products, including foodgrain. Two years ago, the US stopped duty-free import of Indian gold jewellery and brass lamps. The American move was prompted by India’s refusal to reduce import tariffs on manufactured goods from the West....
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This note was uploaded on 12/11/2011 for the course INTBUS 200 taught by Professor Tuli during the Fall '11 term at University of Wisconsin.

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