NITI Aayog has unveiled a report titled “Unlocking $25+ Billion Export Potential – India’s Hand & Power Tools Sector,” highlighting the transformative growth opportunities within India’s hand and power tools industry. The report explores strategies to strengthen India’s competitive edge in the global market and outlines interventions essential for realizing the sector’s export potential. Released by Suman Bery, Vice Chairman of NITI Aayog, along with Members V.K. Saraswat and Arvind Virmani and CEO BVR Subrahmanyam, the report addresses the pivotal role of this industry in shaping India’s economic landscape.
The global trade market for power and hand tools, valued at approximately $100 billion, is expected to grow to $190 billion by 2035. Within this space, hand tools currently account for $34 billion, projected to rise to $60 billion, while power tools, inclusive of accessories, represent $63 billion and are expected to reach $134 billion. India’s exports, comparatively modest, include $600 million in hand tools (1.8% market share) and $470 million in power tools (0.7% market share). In contrast, China dominates the market, exporting $13 billion in hand tools and $22 billion in power tools.
The report suggests India has the capability to achieve $25 billion in exports over the next decade, capturing 10% of the power tools market and 25% of the hand tools market. Achieving these milestones could generate around 35 million jobs and establish India as a reliable, high-quality global manufacturing hub. The report emphasizes fostering innovation and empowering MSMEs as key to fortifying the industrial ecosystem.
India’s competitiveness in the global market is currently hampered by a structural cost disadvantage of 14-17% relative to China, stemming from factors such as higher raw material costs, lower labor productivity, elevated interest rates, and inland logistics costs. The report calls for comprehensive interventions to address these challenges.
Key recommendations include developing world-class hand tool clusters spanning around 4,000 acres under a public-private partnership model. These clusters would feature state-of-the-art infrastructure, worker housing, connectivity, and operational facilities. Structural cost disadvantages can be mitigated by rationalizing Quality Control Order restrictions, import duties on essential raw materials, and export schemes like the Export Promotion Capital Goods initiative.
The report also proposes bridge cost support to offset the cost gap in the absence of market reforms. While existing schemes like Remission of Duties and Taxes on Exported Products and duty drawbacks provide some relief, an additional allocation of ₹8 billion may be necessary. These measures are projected to yield substantial tax revenue over five years, creating significant economic advantages.
The hand and power tools industry is recognized as foundational to the global manufacturing ecosystem, representing a major opportunity for India to emerge as a global manufacturing hub. Positioned as a key pillar of the “Make in India” initiative, the sector is poised to accelerate India’s economic growth, contributing significantly to the nation’s vision of becoming a developed economy by 2047.
The full report detailing India’s ambitions in the hand and power tools industry is available on NITI Aayog’s official website.
