Triumph plans to halt assembly ops in India if govt raises duties
MUMBAI: In a move that could be a setback to Prime Minister Narendra Modi’s ambitious Make in India programme, the local subsidiary of British motorcycle maker Triumph Motorcycles Ltd said it would discontinue assembly operations for its motor bikes in India if the government raises customs duties on completely knocked down (CKD) kits any further.
Triumph Motorcycles India Pvt. Ltd will fall back on importing motorcycles from its Thailand manufacturing facility as completely built units (CBU), using India’s free trade agreement (FTA) with the country, managing director Vimal Sumbly told reporters on Wednesday.
“If the government keeps penalizing CKD, most automakers — including Triumph — will lose out on an effective 5.7% of their turnover (including the revised cess), which is not a small amount of money at the end of the day. It’s not the correct strategy,” Sumbly added.
In the budget for 2018-19, finance minister Arun Jaitley hiked the customs duty on completely knocked down imports of motor vehicles, including motorcycles, from 10% to 15%, along with a hike in duties on specified parts of these vehicles to 15% from 7.5%.
Under the completely knocked down route, components of a vehicle are entirely imported to be assembled locally.