Archive · 13 Nov 2025
Royal Enfield Pitches for 18% GST on All Motorcycles to Boost Exports
Imagine you want to buy a toy motorcycle.
Right now, the government has different prices (taxes) for smaller toy bikes and bigger ones.
Royal Enfield, a company that makes real motorcycles, is asking the government to make the price (tax) the same for all motorcycles, like 18%.
They believe this will make more people buy bigger bikes, help them build more bikes in India, and sell them to other countries.
Right now, the taxes are lower for bikes up to 350cc, but much higher for bikes above 350cc, which makes them harder to sell.
Royal Enfield had a really good sales period recently and wants to keep growing by making their bigger bikes more affordable through a new tax plan.
They feel this change will help India become a leader in making and selling these bigger motorcycles worldwide.
Royal Enfield is lobbying the government for a single 18% GST rate on all motorcycles.
The current GST structure has rates of 18% for bikes up to 350cc and 40% for those above 350cc.
CEO B Govindarajan believes a uniform 18% rate would boost demand for larger motorcycles and support R&D and exports.
He warns that the current high GST on larger bikes hinders scalability and risks India losing its export advantage.
Royal Enfield reported strong Q2 FY25 results with a 45% increase in revenue and sales volume.
- Who
- Royal Enfield (Eicher Motors) CEO B Govindarajan
- What
- Engaging with the government to propose a unified 18% GST rate on all motorcycles.
- When
- Ongoing discussions, with Q2 FY25 financial results reported recently.
- Where
- India (engagement with government), with an eye on international markets.
- Why
- To boost demand, enable R&D investment, achieve economies of scale, and capitalize on global export potential for higher-cc motorcycles.
Royal Enfield's Proposal
Current GST Structure Impact
GST Rate on Motorcycles
Royal Enfield's Proposal
Advocates for a single 18% GST rate on all motorcycles to improve sales and enable investment in R&D for global markets.
Current GST Structure Impact
Current GST structure has reduced rates to 18% for bikes up to 350cc and increased to 40% for bikes above 350cc.
Impact on Higher CC Segments
Royal Enfield's Proposal
A 40% GST on motorcycles above 350cc leads to lower offtake and pressure on scaling production, potentially causing India to lose its export advantage in 450cc and 650cc segments.
Current GST Structure Impact
The higher GST rate on larger motorcycles has resulted in decreased demand and potential R&D investment challenges for Indian manufacturers aiming for global competitiveness.
Market Opportunity
Royal Enfield's Proposal
An 18% uniform GST rate would boost demand, allow for greater R&D investment, and help Indian two-wheeler makers capitalize on the significant international potential for 450cc and 650cc motorcycles.
Current GST Structure Impact
If volumes decrease due to the current tax structure, the industry's focus may shift primarily to the 350cc and below segment, causing the industry to miss out on a crucial global opportunity.
- Company
- Royal Enfield (Eicher Motors)
- CEO's Proposal
- Single 18% GST rate on all motorcycles
- Current GST Rates
- 18% for up to 350cc, 40% for above 350cc
- Royal Enfield Q2 FY25 Revenue
- ₹6,172 crore (up 45%)
- Royal Enfield Q2 FY25 Motorcycle Sales Volume
- 3,27,067 units (up 45%)
- Festive Season Sales Growth
- 50%