The exit is a blow for Indian Prime Minister Narendra Modi's efforts to lure or retain foreign manufacturers.
The move involves $75 million in restructuring costs, some 70 redundancies and the closure of its Bawal plant, walking away from a market worth about 17 million bike and scooter sales a year. This made the Indian motorcycle market one of the worst performing worldwide markets for Harley-Davidson with the overall downturn in its global sales and the Cover-19 pandemic. It has been averaging under 3,000 units a year, compared to annual total new motorcycle sales of 11 million.
While it is cheaper than many other developing economies, India has proven a tough market to crack for foreign automakers.
Last year, Ford Motor Co pared back its interests and ceased independent operations in India by entering into a joint venture with Mahindra & Mahindra. While this unit accounts for a bulk of its sales in India, the company also imports completely built-up (CBU) motorcycles, where the import duty is as high as 50 per cent. Amid the pandemic this year, the company could sell only 100 motorcycles between April-June.
Harley-Davidson sales have taken a hit in recent times. The company said it has more than 25,000 bike owners in India.
Auto experts put the blame on the brand's failure to drive up volumes and derive cost efficiencies by leveraging local tie-ups.
Sanjeev Rajasekharan, managing director of India, has been transferred to Singapore, where he will be head of Asia and emerging markets of the company. "They weren't structured to play that game, being at the very pointy end of the pyramid", Hormazd Sorabjee, Editor of Autocar India told the BBC. If you read between the lines, it means that Harley-Davidson may not officially be present in India anymore, but the company is evaluating other options.
Harley, known for its heavy touring motorcycles, struggled in India mainly because of high import duties - which U.S. President Donald Trump often criticized India for - and also because its locally assembled bikes faced high taxes.
Wisconsin-based Harley-Davidson will shut down its manufacturing plant in the northern Indian state of Haryana and significantly reduce its sales office, the company said in a statement.
Image copyright Getty Images Image caption Dennis Hopper and Peter Fonda ride Harley-Davidsons in a scene from the film Easy Rider. As motorcycling genres evolved and expanded, Harley-Davidson's tramlined range offered a limited choice to enthusiasts, while other brands kept on dishing out newer and varied experiences.