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.