The Indian two-wheeler market, a vital segment of the country’s automotive industry, has witnessed significant changes following the GST Council’s announcement of revised tax slabs, effective from September 22, 2025. The new GST structure introduces a two-tier system for motorcycles, reducing the tax rate for bikes with engine capacities up to 350cc from 28% to 18%, while increasing it to 40% for those above 350cc. This article explores how these changes affect the pricing of popular models like the Royal Enfield Classic 350, Yamaha bikes, and the TVS Raider, offering insights into the implications for buyers and manufacturers.
Royal Enfield Classic 350: A More Affordable Retro Icon
The Royal Enfield Classic 350, powered by a 349cc air-oil cooled engine, is one of the most iconic motorcycles in India, known for its retro design and robust performance. With the new GST rate of 18% for bikes under 350cc, the Classic 350 is set to become more affordable. Previously, with a 28% GST, the base model’s ex-showroom price was approximately ₹1,97,253. Post the GST reduction, this price is expected to drop to around ₹1,77,527, offering savings of nearly ₹20,000. This price cut makes the Classic 350 an even more attractive option for retro motorcycle enthusiasts and first-time buyers, potentially boosting sales during the festive season.
The Classic 350’s appeal lies in its 20.2 BHP engine, classic retro styling with a modern touch, and an average mileage of 30-37 kmpl. The GST reduction is likely to enhance its accessibility, especially for budget-conscious buyers seeking a blend of heritage and performance. Royal Enfield has confirmed it will pass on the full benefit of the GST cut to customers, ensuring the Classic 350 remains a top choice in the mid-size segment.
Yamaha Bikes: Price Cuts Across the Lineup
Yamaha’s diverse lineup, including models like the R15, MT-15, FZ25, and Aerox 155, all fall under the 350cc threshold and will benefit from the reduced GST rate of 18%. Previously taxed at 28%, these bikes are expected to see price reductions of up to ₹17,500, depending on the model and variant. For instance, a Yamaha bike with an ex-showroom price of ₹1,50,000 could see a price drop of approximately ₹15,000, making models like the sporty R15 or the versatile FZ25 more accessible to young riders and urban commuters.
Yamaha’s commitment to passing on the GST benefits ensures that its commuter and performance-oriented models become more competitive in the market. The reduction is particularly significant for scooters like the Aerox 155, which cater to urban buyers seeking style and efficiency. This move is expected to drive demand, especially during the festive period, as Yamaha capitalizes on the lower tax slab to attract a broader customer base.
TVS Raider: A Budget-Friendly Commuter Gets Cheaper
The TVS Raider, equipped with a 124.8cc engine, is a popular choice in the commuter segment, known for its sporty design and efficient performance. With the GST rate slashed from 28% to 18%, the Raider’s ex-showroom price, previously starting at around ₹87,625, is expected to decrease by approximately ₹8,000-10,000. TVS Motor Company has announced that it will pass on the full GST benefit to customers, making the Raider even more affordable for entry-level buyers and daily commuters.
The Raider’s 11.2 BHP engine and features like a digital cluster and multiple riding modes make it a value-for-money option in the 125cc segment. The GST reduction is likely to further boost its appeal, especially in price-sensitive rural and semi-urban markets, where affordability is a key factor. TVS’s decision to adjust prices across its sub-350cc lineup, including the Raider, positions it to capture a larger market share during the festive season.
Broader Implications for the Two-Wheeler Market
The GST Council’s decision to lower taxes on sub-350cc two-wheelers, which constitute nearly 98% of India’s motorcycle market, is a strategic move to enhance affordability and stimulate demand. This benefits mass-market manufacturers like Royal Enfield, Yamaha, and TVS, whose sub-350cc models dominate sales. However, the 40% GST on bikes above 350cc, such as Royal Enfield’s Himalayan 450 or Interceptor 650, could dampen demand in the premium segment, as prices may rise by ₹13,000 to over ₹33,000 depending on the model.
Industry leaders like Royal Enfield’s Siddhartha Lal have expressed concerns over the higher tax on larger bikes, arguing that it could harm India’s global competitiveness in the mid-size motorcycle segment. A uniform 18% GST across all two-wheelers has been proposed to sustain growth and investment in the industry. Despite these concerns, the GST reduction for sub-350cc bikes is expected to drive sales, particularly during the festive season starting September 22, 2025.
Conclusion
The revised GST rates bring good news for buyers of the Royal Enfield Classic 350, Yamaha bikes, and the TVS Raider, with significant price reductions making these models more accessible. The 18% GST slab enhances affordability for the majority of the Indian two-wheeler market, benefiting commuters and enthusiasts alike. However, the 40% tax on bikes above 350cc may challenge aspirational buyers and premium manufacturers. As the new rates take effect, consumers are advised to check with local dealers for exact ex-showroom prices, as savings may vary by variant and location. This GST reform is poised to reshape buyer preferences and market dynamics in India’s vibrant two-wheeler industry.
