India’s Hand and Power Tools Sector Expected to Generate Over $25 Billion in Exports
The tools industry, encompassing both hand and power tools, plays a crucial role in the global manufacturing landscape, supporting various sectors such as construction and automotive. A recent report by NITI Aayog and the Foundation for Economic Development outlines a strategic plan to elevate India’s exports in this sector from a modest $1 billion to over $25 billion by 2035. This ambitious roadmap highlights India’s potential to become a competitive player in the global market, leveraging its strengths in low-cost labor and a growing manufacturing base.
Current Landscape of India’s Tools Sector
India’s tools sector is characterized by a modest export footprint, with current exports projected at $600 million for hand tools and $425 million for power tools in 2025. This represents only a small fraction of the global market, which was valued at approximately $100 billion in 2022. The report emphasizes that while India’s current share is limited, the country possesses significant advantages, including low labor costs and strategic geographic positioning. The hand tools segment, which includes products like wrenches and screwdrivers, has developed a robust ecosystem, particularly in regions like Punjab and Maharashtra. However, the power tools sector faces challenges due to the lack of a comprehensive manufacturing ecosystem for precision components.
Export Potential and Strategic Goals
The report sets ambitious targets for India’s tools sector, aiming for a 25% market share in hand tools and a 10% share in power tools by 2035. This translates to projected exports of $15 billion for hand tools and $12 billion for power tools, contributing to a total export opportunity exceeding $25 billion. Additionally, the sector is expected to generate approximately 3.5 million direct and indirect jobs. The report also highlights the importance of tapping into growing markets, particularly in the U.S. and European Union, which currently account for a significant portion of global imports.
Government Support and Policy Recommendations
To facilitate this growth, the Indian government has implemented several support mechanisms, including the Remission of Duties and Taxes on Exported Products (RoDTEP) and the Duty Drawback Scheme. These initiatives aim to enhance the competitiveness of Indian exporters by providing rebates and duty exemptions. The report also outlines strategic policy recommendations, such as creating world-class manufacturing clusters and implementing structural reforms to reduce import duties and streamline compliance processes. These measures are intended to bolster India’s position as a viable alternative to other manufacturing hubs, particularly China.
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