Executive Chairman of Eicher Motors, the parent of Royal Enfield, has called for a uniform 18% GST on all two-wheelers. He warned that a split tax structure could undermine India’s global leadership in the sector. In a social media post on Saturday, Lal made an “urgent and heartfelt” appeal that differential taxation could shrink a vital segment of the market while adding little to government revenue.
“Motorcycles above 350cc make up just about 1% of India’s two-wheeler market. Raising GST on them would add negligible revenue but contract the segment,” he wrote. “For Indian riders, these motorcycles are not luxury goods; they are efficient, affordable alternatives to cars, offering lower fuel use and maintenance — benefits that also help reduce India’s fuel imports,” he added.
Reports suggest the government is considering lowering GST for motorcycles and scooters up to 350cc but hiking the rate on larger bikes, which are currently taxed at 28%, to as high as 40%.
GST move can ‘cripple investment’
He warned that such a move would “cripple investment and scale” and will in turn cut into India’s ability to expand globally. “A differential rate would dramatically shrink the domestic above-350cc segment and choke the investment needed for India to compete internationally,” he said.
His post further stated that India already leads markets such as China, Japan, Europe and the US in two-wheelers. A uniform GST regime, He argued, would not only preserve this leadership but also position India to dominate the emerging electric two-wheeler market. “By achieving scale in EVs, India can establish itself as the world’s hub for next-generation mobility,” he wrote.
Punitive GST
Highlighting industry trends, He pointed out that Indian brands already dominate the small-capacity segment globally and are steadily making inroads into the mid-capacity market. A punitive GST, he cautioned, would relegate domestic manufacturers to the lower segment while leaving higher-value markets open to foreign rivals.
