Gurgaon: The India-New Zealand free trade agreement has removed a tariff barrier for Gurgaon-Manesar’s auto and engineering industry, but the bigger challenge will be turning market access into actual orders.India exported $136.3 million worth of engineering goods to New Zealand in FY25, against New Zealand’s engineering imports of about $23.3 billion, giving Indian exporters only around 0.6% of the market, according to the commerce ministry’s assessment of the FTA.The Centre has identified the Gurgaon-Manesar auto cluster as a potential beneficiary, as New Zealand will eliminate duties on all Indian exports once the agreement enters into force.New Zealand levies tariffs of up to 10% on around 450 tariff lines covering key Indian exports, including automobiles and auto components. Its average applied tariff of 2.2% will become zero. In all, the FTA provides for immediate elimination of duties on all 8,284 tariff lines. For Gurgaon-linked sectors, this covers auto and transport products, engineering, electrical and mechanical machinery, textiles, footwear and other manufactured goods.The agreement was signed in Delhi on April 27. New Zealand’s Parliament passed the implementing legislation this week, with the bill completing its third reading on Sept 15. The agreement will take effect after both countries complete their respective ratification procedures.India’s total exports to New Zealand stood at about $711 million in FY25. Other major categories included textiles and clothing at $103.14 million, electronics and electrical machinery at $68.26 million, gems and jewellery at $16.91 million and footwear at $2.28 million.For Haryana, the export base in FTA-relevant sectors is substantial. NITI Aayog’s export data puts the state’s FY24 exports of motor-vehicle parts at about Rs 7,155 crore, motor cars at Rs 6,000 crore and motorcycles/cycles at Rs 3,824 crore. Jewellery articles accounted for Rs 3,046 crore and women’s woven apparel Rs 2,134 crore.However, there is no publicly accessible official figure for how much of Haryana’s or Gurgaon’s exports is destined for New Zealand. If Gurgaon’s existing exports to New Zealand are small, the FTA represents market creation rather than a tariff reduction on an established trade flow. If the district already ships substantial volumes of auto components, machinery or other products there, the agreement could provide an immediate price advantage.PFTI chairman Deepak Maini said Gurgaon companies in automobiles, auto components, engineering and other manufacturing segments could use the agreement to seek new customers in New Zealand. “But industry expectations will need to be tested against actual orders, as freight costs, technical standards, rules of origin and the ability of individual manufacturers to build distribution networks in New Zealand will determine how much of the tariff advantage is ultimately captured,” said Maini.The investment component offers another potential avenue. New Zealand has committed to promote $20 billion of private-sector investment in India over 15 years, but this should not be treated as a guaranteed $20 billion inflow into Haryana or Gurgaon.For Gurgaon-Manesar, therefore, the immediate gain from the FTA is measurable — removal of duties that could reach 10% on some key product lines. The bigger economic test is whether the cluster can convert that tariff advantage into new New Zealand orders, investment and supply-chain relationships.
