Harley Davidson has chosen India for its first overseas plant to build its iconic bikes. 

The plant that is modelled on "complete knock down" (CKD) method of assembling will come up in the northern Indian state of Haryana and roll out the firt bike in 2011, CNN reported on Thursday.

"What we are doing is made in USA, assembled in India, which will have a positive job effect back home which is why we are driving this investment as quickly as we are," a CNN report cited Anoop Prakash, Managing Director for Harley Davidson India.

Under the CKD agreement, Harley Davidson India will import parts from its parent company and assemble them at the Haryana plant. 

India, the world's second fastest-growing two-wheeler market after China, plays an important role in the company's plan to expand its brand, he said. More than 10 million motorcycles -- most of them of up to 200 CC engines -- were sold in India in the 2009-2010 fiscal year.

"We see a distinctive credible growth story here," Prakash said.

Besides the obvious market potential in India, Harley Davidson aims to bring down the cost by getting the bikes made in India. This could end up with savings of up to 80 per cent on import duties, which will help bring down the cost.

Harley Davidson that went on sale in India in July 2010 has already met the target of 200-250 bikes for the six months of its retail operations there.

The company is set to open its fifth dealership in the tech-city of Bangalore this month.