Two-wheel vehicle industry leader, Siddhartha Lal, calls for a standardized Goods and Services Tax (GST) within the bike sector

In a significant development, Siddhartha Lal, the Executive Chairman at Royal Enfield and Eicher Motors Ltd, has appealed to Indian policy makers for a uniform Goods and Services Tax (GST) on all two-wheelers. This move, if implemented, could potentially secure India's global leadership in the two-wheeler market.

Lal's appeal comes at a time when the Indian economy, as represented by the Nifty 50, Nifty Bank, and Sensex, is at a crossroads. Meanwhile, the US market indices, including the Dow Jones, S&P 500, and NASDAQ Composite, have stabilised.

The proposed GST rejig could see a reduction in tax rates for motorcycles and scooters with engine capacities up to 350 CC. However, motorcycles with engine capacities of 350 cc and above could face a higher GST rate of around 40%. This could potentially relegate Indian players to smaller capacity two-wheelers, a segment they already dominate worldwide.

Lal argues that a uniform 18% GST across all two-wheelers is critical to sustain the momentum. He believes that this move will not only secure India's global leadership in two-wheelers but also enable India to dominate the general electric two-wheeler market.

India currently leads China, Japan, Europe, and the US in two-wheelers. A uniform GST, according to Lal, will help maintain this lead, as a higher GST on larger capacity two-wheelers could contract the segment. On the other hand, lowering GST for less than 350cc motorcycles could damage a segment vital to India's global edge.

For Indian riders, motorcycles above 350cc are not luxury goods, but efficient, affordable alternatives to cars, offering lower fuel use and maintenance. Lal stresses that these motorcycles are essential for many Indians, and a higher GST could make them less accessible.

In a related development, the Directorate General of Foreign Trade (DGFT) has extended the Export Promotion period and waived cotton duty till December 2025 for textile exporters. This move is expected to provide much-needed relief to the textile industry, which has been grappling with various challenges.

The article was published on August 30, 2025. It is worth noting that the push for a uniform GST on two-wheelers was first advocated by Nitin Gadkari and Piyush Goyal in 2023. The implementation of this policy could have significant implications for the Indian automobile industry and the economy as a whole.

As the Indian government continues to navigate the complexities of tax reform, the appeal for a uniform GST on two-wheelers remains a crucial issue. The potential benefits, including securing India's global leadership in two-wheelers and enabling India to dominate the electric two-wheeler market, cannot be ignored. However, the impact on the smaller capacity segment and the affordability for Indian riders must also be carefully considered.

Two-wheel vehicle industry leader, Siddhartha Lal, calls for a standardized Goods and Services Tax (GST) within the bike sector