Sales of premium motorcycles in India — those with engine capacities above 350 cubic centimetres (cc) — showed resilience, registering 4 per cent year-on-year growth in October-November 2025 despite a sharp increase in the goods and services tax (GST) rate, indicating stable demand in this niche segment.
Effective September 22, 2025, motorcycles exceeding 350 cc attract 40 per cent GST, up from 31 per cent, lifting prices for larger and more aspirational models.
Sales volumes rose 7.2 per cent year-on-year in October 2025 to 19,555 units, before moderating by 1.4 per cent in November to 10,396 units. Cumulatively, volumes grew 4 per cent over the two-month period to 29,951 units.
The October increase was driven by the 350–500 cc sub-segment, which includes models such as the Bajaj Dominar, Royal Enfield Guerrilla 450, Kawasaki Eliminator and Honda Mavrick 440.
The moderation in November was attributed to a decline in the 500–800 cc category, which includes models such as the Piaggio Aprilia RS660, Honda CBR 650F and Kawasaki Ninja 650. Higher-capacity bands (800–1,600 cc) posted incremental gains, though on a small base.
“Motorcycles above 350 cc account for only about 1 per cent of total motorcycle sales,” an industry expert said. “While the higher GST has weighed on November volumes, demand has not seen a sharp drop as buyers in this segment are relatively less price-sensitive.”
He cautioned that the widening price gap between 350 cc and 450 cc models is becoming harder to justify without meaningful product differentiation, which could affect bikes in the Bajaj 400 cc, Triumph and Royal Enfield 450 cc families.
In contrast, motorcycles below 350 cc benefited from a lower GST rate of 18 per cent. This segment supported overall industry volumes, recording 5 per cent growth over the two months.
Strong traction was seen in the 150–200 cc category (Hero Xpulse 200, Yamaha MT 15 and TVS Apache) and the 250–350 cc category (Royal Enfield Bullet 350 and Honda CB 350), indicating continued consumer preference for higher-powered, yet more affordable motorcycles.
Analysts at Icra said the broader two-wheeler market rebounded after the ‘GST 2.0’ changes, with retail sales rising 22 per cent year-on-year during the festive period. This was supported by festive demand, stable rural consumption and GST reductions in select categories.
“Post GST 2.0, GST rate cuts and the decline in vehicle prices have unlocked deferred demand, notably among first-time buyers and those in tier-2 and tier-3 cities,” said senior vice-president and co-group head, Corporate Ratings, Icra.
Icra’s channel checks indicate that original equipment manufacturers (OEMs) largely passed on GST benefits in sub-350 cc segments, and promotional schemes helped boost footfalls. Some OEMs estimate the rate cuts contributed 6–9 per cent growth during the festive season.
Even in the 350 cc-plus segment, where the tax increased, several manufacturers temporarily absorbed the impact to maintain price points and clear inventories, helping sustain demand.
The 350 cc-plus segment has grown at over 20 per cent compound annual growth rate (CAGR) in the five years leading up to FY25, outpacing the 2 per cent growth of the overall motorcycle market. While it accounts for less than 2 per cent of total sales, demand is driven by affluent urban and semi-urban buyers, higher aspirational appeal and improved product portfolios.
However, Icra warned that the 40 per cent GST on premium bikes, alongside sharp rate reductions for sub-350 cc segments, is likely to be a headwind.
“The increase in GST to around 40 per cent for 350 cc-plus motorcycles is likely to dampen discretionary purchases and shift preferences towards lower-capacity models,” he said. “While OEMs have absorbed the higher tax incidence over the last two months, their ability to sustain this will be limited as demand normalises, potentially weighing on growth going forward.”
