In a major push to position India as a global manufacturing powerhouse, NITI Aayog has unveiled an ambitious report titled “Unlocking Dollar 25+ Billion Export Potential – India’s Hand & Power Tools Sector.” The report envisions India multiplying its export volume nearly 15 times over the next decade and creating around 35 lakh new jobs. This transformative roadmap was launched by NITI Aayog Vice Chairman Shri Suman Bery, in the presence of Members Dr. V.K. Saraswat and Dr. Arvind Virmani, and CEO Shri B.V.R. Subrahmanyam.
The global trade in hand and power tools, currently estimated at around dollar 100 billion, is projected to nearly double—reaching dollar 190 billion by 2035. Despite India’s strong traditional base in metalwork and small manufacturing, the country’s current global market share is modest: just 1.8 per cent in hand tools and 0.7 per cent in power tools. China, in comparison, dominates the landscape with around 50 per cent of global hand tool exports and 40 per cent in power tools.
Shri Suman Bery emphasized that India stands at a crucial juncture where timely interventions could help it leapfrog into a leadership position in precision tool manufacturing. “With the right industrial ecosystem, India has the potential to become a trusted, high-quality manufacturing destination globally,” he said.
An Expanding Global Market
The report breaks down the growth expectations of the sector. Hand tools, currently worth dollar 34 billion worldwide, are expected to expand to dollar 60 billion by 2035. Meanwhile, power tools, including accessories, are poised to rise from dollar 63 billion to dollar 134 billion in the same period.
NITI Aayog projects that India can realistically target dollar 25 billion in exports from this sector alone over the next ten years. Achieving this goal, it estimates, could create approximately 35 lakh jobs—especially in tier-2 and tier-3 cities where such manufacturing clusters often thrive.
But First, Bridging the Gaps
The path forward, however, is not without hurdles. Indian manufacturers face a structural cost disadvantage of 14 to 17 per cent compared to Chinese competitors. This cost gap arises from expensive raw materials like steel, plastic, and motors; low labour productivity due to wage rules and overtime caps; high interest rates; and costly logistics from India’s landlocked industrial regions to ports.
The report calls for urgent, structured reforms to bridge this gap and build a competitive environment.
Three Strategic Interventions for Sectoral Upliftment
NITI Aayog lays out a three-pronged strategy that could unlock the full potential of India’s hand and power tools industry:
1. World-Class Cluster Development:
Establishing 3–4 high-tech manufacturing clusters across roughly 4,000 acres. These zones would operate under a Public-Private Partnership (PPP) model and provide plug-and-play manufacturing units, logistics hubs, housing for workers, and even convention centres for showcasing India’s capabilities.
2. Structural Reforms for a Competitive Edge:
Key reforms include reducing import duties on critical raw materials, easing Quality Control Orders (QCOs), and simplifying export-related schemes such as the EPCG (Export Promotion Capital Goods) scheme. Revisions in labour laws and building regulations are also essential to help businesses scale efficiently.
3. Cost Bridging Support as a Growth Catalyst:
If policy reforms are delayed, the report recommends a short-term support package of up to ₹8,000 crore. This isn’t a subsidy, it argues, but an investment expected to yield two to three times its value in tax revenues over five years—making it both financially and economically prudent.
Tools Industry: Backbone of a ‘Viksit Bharat’
The report underscores the pivotal role this sector can play in India’s journey towards becoming a developed nation by 2047—Viksit Bharat @2047. As global demand surges, especially in construction and DIY (do-it-yourself) markets, India’s entry into the global manufacturing elite could be powered significantly by its hand and power tools industry.
By nurturing MSMEs, encouraging innovation, and providing an enabling regulatory environment, India can not only tap into a dollar 190 billion global market but also uplift millions of livelihoods and cement its position in the international manufacturing value chain.
In short, NITI Aayog’s vision is not just about tools, it’s about building the economic machinery for a stronger, self-reliant India.
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