The hand and power tools sector in India is poised for significant growth, with projections showing the potential to scale exports dramatically by 2035. According to a joint report by NITI Aayog and the Foundation for Economic Development, India could increase its hand tools exports from Rs. 8,530 crore (US$ 1 billion) in FY25 to Rs. 2,13,250 crore (US$ 25 billion) by 2035. The global market for hand and power tools is forecast to grow significantly, presenting a prime opportunity for India to enhance its share in the industry.

Growth Potential of India's Tools Sector

Currently, India holds a 1.8% share in global hand tools exports, amounting to Rs. 5,118 crore (US$ 600 million). In power tools, the share is even smaller, at just 0.7%, equating to Rs. 3,625.25 crore (US$ 425 million). However, the roadmap for the sector envisions India capturing 25% of the global hand tools market and 10% of the power tools market by 2035. This growth trajectory could generate an estimated 3.5 million jobs, positioning India as a strategic alternative to China in global supply chains.

Investment and Development Plans

The report outlines the creation of three to four world-class manufacturing clusters by 2035, covering approximately 4,000 acres. These clusters would be backed by Rs. 12,000 crore (US$ 1.41 billion) in government investment, alongside Rs. 45,000 crore (US$ 5.28 billion) from the industry. This investment will help expand production capacity and improve the competitiveness of Indian-made tools in the global market.

Necessary Reforms for Growth

In order to facilitate this growth, the report recommends several reforms, including aligning India's labour laws with international norms, rationalising the Quality Control Orders, and reforming the Export Promotion Capital Goods (EPCG) scheme. These measures aim to improve the overall ease of doing business in the tools sector and ensure that India’s products meet global standards. Additionally, promoting domestic Research and Development (R&D) will drive innovation and enhance the competitiveness of Indian manufacturers.

Addressing Delays and Bridge Support

If the proposed reforms face delays, the report suggests a Rs. 5,800 crore (US$ 680 million) bridge support package. This package would include subsidies for competitiveness, capital, and logistics, ensuring that the sector does not lose momentum during the transition period. With rising tariffs on Chinese goods and shifts in global trade, this package will help Indian manufacturers remain competitive on the world stage.

India's Advantage: Low-Cost Labour and MSME Clusters

India’s low-cost labour and MSME-driven clusters, particularly in states like Punjab and Maharashtra, offer a significant advantage for the tools sector. These regions are already home to several small and medium-sized enterprises that are well-positioned to scale up production and meet the growing demand for tools in both domestic and international markets.

Conclusion

India's hand and power tools industry has immense growth potential, with the right investments and reforms in place. By focusing on developing world-class manufacturing clusters, aligning labour laws with international standards, and fostering innovation through R&D, India can become a global leader in the tools sector. This transformation will not only create millions of jobs but also provide a strategic alternative to China in the global supply chain.

In summary, India’s tools industry stands at the cusp of a significant expansion, poised to capture a larger share of the global market by 2035. With the right policy support and infrastructure development, India has the potential to become a key player in the hand and power tools sector, driving growth and innovation across multiple industries.

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