India to cut tariffs on 30 products including luxury cars and bikes, before Indian PM’s US trip

India is set to revise import tariffs on over 30 items, including luxury automobiles and solar cells, potentially increasing imports from the United States, according to a senior official from the finance ministry.

To counter US President Donald Trump's growing tariff measures, the Indian government has already lowered duties on several goods, such as high-end motorcycles, automobiles, and chemicals, in the latest budget, reports Financial Express. 

However, it has also introduced an alternative levy known as the Agriculture Infrastructure Development Cess (AIDC) on multiple products.

Key items under AIDC tariff review

Reduction in basic customs duties

In the recent budget, India has reduced basic customs duties on multiple products, including luxury vehicles, solar cells, and machinery. The peak import tariff has been cut from 150% to 70%, while average tariffs have dropped from 13% to below 11%. Meanwhile, the AIDC has been increased on selected items.

Agriculture infrastructure development cess (AIDC)

Following the reduction in peak import tariffs, India has imposed an AIDC levy ranging from 5% to 70% on a list of 32 items, including luxury automobiles and chemicals. Previously, these items were exempt from the AIDC tariff.

Sector-wise impact of tariff changes

Luxury cars & motor vehicles

Luxury automobiles with a CIF (cost, insurance, and freight) value exceeding $40,000 will now face a reduced basic customs duty of 70%, along with a 40% surcharge. Transport vehicles and used motor vehicles will be subject to an AIDC levy of 20% and 67.5%, respectively, while their basic customs duty has been lowered from 40% to 20%. Yachts and sports vessels will now have a 7.5% surcharge.

Solar cells & modules

Solar cells, modules, and semiconductor devices will now have an import tariff of 20%, down from the previous 25%-40%, with an additional surcharge ranging from 7.5% to 20%.

Chemicals

Laboratory chemicals will see a reduction in basic customs duty from 150% to 70%, alongside a new AIDC levy of 70%.

Building materials

Marble, granite, and slabs will now attract a 20% surcharge, in addition to a reduced 20% basic customs duty, down from 40%.

Household items

Footwear and raw materials used for manufacturing them will be subject to an 18.5% surcharge. Bicycles will have a 15% surcharge after a lowered basic customs duty of 20%. Additionally, home furniture, smart electricity meters, and electronic toy parts will see surcharges ranging between 5% and 20%.

These tariff revisions reflect India's efforts to balance trade policies while countering tariff measures from the US and fostering domestic infrastructure development.