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Union Budget 2018: Impact on Two Wheeler Industry

The Union Budget 2018 was keenly followed by most especially because this was the last budget by the current government ahead of elections next year.

Here in this article, we discuss its repercussions on the Two Wheeler Industry and Two wheeler loans:

As per the new budget, the government has hiked customs duty on two-wheelers. Initially, customs duty marked on CBU (Completely Built Up) motorcycles was quite high. So the makers imported CKD (Completely Knocked Down) units. However, the recent budget has increased the customs duty on CKD imports from 10% to 15%. As an added blow, the customs duty on certain accessories has been raised from 7.5 to 15%. Finance Minister Arun Jaitley justified the move saying it would encourage companies to increase manufacturing in India under the government’s “Make in India” initiative.

According to experts, since every company has to import certain components, the rise is likely to impact the automobile industry on the whole. More so the premium bike industry, which has a greater dependancy on imported parts. In light of already high GST rates applicable in this segment, premium bike manufacturers are feeling the heat.

Now, let’s evaluate the pros and cons of the Union Budget 2018 on the bike industry:


  • For companies with a turnover of Rs. 250 crores and above, the corporate tax rate would be reduced to 25%. This decision will surely go down well with automobile manufacturers.
  • Further, there would be an excise duty cut of Rs. 2 per litre on unbranded petrol.


  • With the increase in cess on the imported goods, premium bikes are likely to cost more.
  • No incentives have been provided for R&D. The budget did not address the request by companies for more fund allocation to FAME (Faster Adoption and Manufacturing of Electric and hybrid vehicles).
  • Despite growing environmental concerns, the Electric Vehicles (EV) sector has been left untouched. There was no mention of added infrastructure (charging stations) or any reduction/relaxation in taxes on Electric Vehicles (EV). The industry was hoping for a strong incentive push to the EV Sector.

As you can tell, it’s been a bit of a mixed bag for two-wheelers in Budget 2018. Even so, there isn’t likely to be a huge impact on buyers. Through bike finance, bike on emi and a viable bike loan interest rate, it will always be convenient for people to take a two wheeler loan and get a new set of wheels.

Access to an auto loan is fairly straightforward. The first step is to check one’s eligibility for a 2 wheeler loan below:

  • One must be a salaried professional over 18 years of age or a self-employed individual over 21 years.
  • If one is a salaried professional, s/he will need minimum 6 months of work experience. And if one is self-employed, s/he will need a minimum of 1 year of total business experience.

Taking a loan for bike couldn’t be easier. So, apply for a bike loan and get your dream ride right away!


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