India’s Hand & Power Tools Sector Set to Unlock $25B Export Potential by 2035

The global trade in hand and power tools currently stands at approximately $100 billion and is expected to nearly double to $190 billion by 2035.

In a landmark move aimed at transforming India’s industrial manufacturing landscape, NITI Aayog has released a comprehensive report titled “Unlocking $25+ Billion Export Potential - India’s Hand & Power Tools Sector.” This pivotal study, launched by Shri Suman Bery, Vice Chairman of NITI Aayog, in the presence of eminent members Dr. V.K. Saraswat, Dr. Arvind Virmani, and CEO Shri BVR Subrahmanyam, lays out an ambitious roadmap for boosting India's global competitiveness in the hand and power tools industry.

The report underscores the sector's transformative potential to drive India’s economic growth, generate massive employment, and establish the country as a reliable, high-quality manufacturing hub globally. With strategic reforms and targeted investments, India can significantly expand its current share in the global tools market, achieving $25 billion in exports and creating approximately 35 lakh new jobs over the next decade.

Global Market Outlook: Massive Opportunity for Indian Tools Sector

The global trade in hand and power tools currently stands at approximately $100 billion and is expected to nearly double to $190 billion by 2035. Within this, hand tools currently account for $34 billion, projected to rise to $60 billion, while power tools—largely driven by the growing demand for electrical tools—make up $63 billion today and are expected to reach $134 billion.

At present, China dominates the market with a 50% share in hand tools ($13 billion) and 40% in power tools ($22 billion). India’s exports remain modest at $600 million for hand tools (1.8% market share) and $470 million for power tools (0.7% market share). However, the report identifies a clear path for India to drastically increase its global footprint, aiming to capture 25% of the hand tools market and 10% of the power tools market by 2035.

India’s Strategic Goals: Vision 2035 for Tools Sector

According to NITI Aayog, achieving $25 billion in exports from the hand and power tools sector is not just possible but essential for India's ambition of becoming a Viksit Bharat (Developed India) by 2047. The report aligns this goal with other flagship initiatives such as Make in India, Atmanirbhar Bharat, and Skill India, underscoring the tools sector's foundational role in strengthening the entire manufacturing ecosystem.

The proposed growth strategy rests on three core pillars:

1. Developing World-Class Tool Clusters

The report emphasizes the need to establish 3-4 globally competitive hand tool manufacturing clusters across India, encompassing approximately 4,000 acres. These clusters would be developed under a public-private partnership (PPP) model and feature:

• Plug-and-play infrastructure

• Worker housing and dormitories

• High-speed connectivity

• Convention and R&D centers

These dedicated zones would streamline production, improve operational efficiency, and foster innovation by creating an ecosystem tailored for tool manufacturing.

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2. Structural Reforms to Reduce Cost Disadvantages

India currently faces a 14–17% cost disadvantage when compared to China, primarily due to higher input costs, labour inefficiencies, and logistics challenges. The report outlines several policy interventions to close this gap:

• Rationalizing import duties on key raw materials such as steel, plastic, and motors

• Reforming labour laws to enhance productivity, including easing overtime restrictions

• Simplifying the Export Promotion Capital Goods (EPCG) scheme

• Reforming Quality Control Orders (QCOs) for essential components

• Lowering financing and logistics costs through improved infrastructure and credit facilitation

By addressing these structural issues, Indian manufacturers can become more cost-competitive globally.

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3. Bridge Cost Support to Catalyze Growth

While the report notes that many cost challenges can be addressed through reforms, it also highlights the potential need for bridge support of ₹8,000 crores in the interim, particularly if reforms are delayed or only partially implemented.

This support should not be seen as a subsidy, the report argues, but rather an investment with a high return—expected to generate 2–3x value in tax revenue over the next five years. If policy measures are successfully executed, existing schemes like RoDTEP and duty drawbacks may be sufficient without the need for additional subsidies.

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Employment & Skill Development: A Major Boon for MSMEs

The tools industry is closely tied to India’s vibrant Micro, Small, and Medium Enterprises (MSME) sector. By increasing support to MSMEs through skill development programs, credit availability, and market access, India can significantly boost employment in this segment.

A projected 35 lakh new jobs—many of them skilled and semi-skilled—can be created through expanded exports. These jobs will be spread across states like Punjab, Tamil Nadu, Gujarat, and Uttar Pradesh, which already have tool manufacturing hubs.

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Driving Innovation & Sustainability in Manufacturing

The report also encourages the sector to adopt sustainable and innovative manufacturing practices by:

• Encouraging the use of green energy and low-emission processes

• Promoting digitalization and Industry 4.0 practices

• Supporting R&D for smart tools and ergonomic designs suited for global markets

This forward-looking approach aims to position Indian products not only as affordable but also as high-quality and eco-friendly.

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A Pivotal Role in India’s Manufacturing Dream

The hand and power tools industry is more than just a support sector—it is a cornerstone of global manufacturing. From automotive to aerospace, from construction to DIY consumer markets, tools form the backbone of industrial and domestic activity.

As India aspires to emerge as a global manufacturing hub, the success of its tools industry will be a litmus test for broader industrial progress.

India’s Moment to Take the Lead

India’s hand and power tools sector stands at a critical juncture. With strategic reforms, infrastructure investment, and global positioning, the country has a unique opportunity to transform a currently under-leveraged sector into a $25 billion export engine by 2035.

In doing so, it will not only fuel economic growth and generate millions of jobs, but also help realize the vision of a Viksit Bharat by 2047.

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📄 Read the Full Report Here: India’s Hand & Power Tools Sector Report – NITI Aayog (PDF)

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