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Harley Davidon entry in India
linked to Indian banks in US
BY OUR AUTO CORRESPONDENT
February 25, 2006: What do ICICI
Bank and SBI have to do with a mean
machine? The two Indian banks are said
to be linking their expansion in the
United States with Harley Davidson's
entry into India.
With the Bush administration hoping
that India would lower import duty for
Harley Davidson besides allowing it to
ply on Indian roads despite not
complying with the Euro emission
norms, this seems to be a possibility.
The Indian administration has made it
clear that it was not in a position to
allow Harley Davidson's import without
complying with the Euro II emission
norms. However, the Centre has said
that it was willing to follow a system
of tariff rate quotas which will mean
lower customs duty for a certain
number of bikes, beyond which the
applicable customs duty will be
levied.
However the government is likely to
push itself into a sticky situation.
When its allows tariff rate quotas for
Harley Davidson, other automobile
makers, who have been complaining of
the high import duties in India might
also follow suit.
The role of the banks comes in here.
India will give the method a try if
the US government was willing to grant
fresh branch licences to ICICI Bank,
SBI and Bank of Baroda, whose
proposals have been pending for
several years and also fast-track new
rules for export of Indian mangoes.
Any progress on Harley Davidson's case
has to be linked to the progress on
banking licences, said a report
quoting sources. With Harley Davidson
betting big on India, Indian banks
could just get a few more US branches.
India is in fact trying to seize the
chance to negotiate a better deal for
its banks, knowing that the Bush
adminstration will look at a good deal
for its Harleys.
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