India Targets US$ 25 billion Export Goal in Tools Sector
India is aiming to increase its share in the global hand and power tools market with a target of US$ 25 billion in exports over the next decade, according to a report titled ‘Unlocking $25+ Billion Export Potential – India’s Hand & Power Tools Sector’, released by NITI Aayog, a public policy think tank.
The report outlined a plan to help the country secure 25 percent of the global hand tools market and 10 percent of the power tools segment, creating 35 lakh potential jobs. The report also highlighted that global trade in these tools could reach US$ 190 billion by 2035,
India, while currently holding a modest share, with US$ 600 million in hand tools and US$ 470 million in power tool exports, is well-positioned to scale up significantly. The report acknowledged current cost disadvantages for India, such as higher raw material costs, lower labor productivity, elevated interest rates, and higher logistics costs. However, compared to global competitors, particularly China, the report highlights India’s potential to overcome these barriers through targeted reforms and investments.
Among the key recommendations to address these issues is the development of world-class manufacturing clusters across 4,000 acres built under public-private partnerships. These would comprise of modern infrastructure, plug-and-play facilities, worker housing, and improved connectivity to support industrial growth.
The report also proposes rationalizing import duties on critical raw materials, streamlining Quality Control Orders, simplifying the Export Promotion Capital Goods (EPCG) scheme, and setting regulations to improve global competitiveness. Notably, it states that with the right reforms, no additional government funding would be required beyond current schemes such as Remission of Duties and Taxes on Exported Products (RoDTEP) and duty drawbacks.
In the case of such reforms being absent, the report estimates a bridge cost support of INR 8,000 crore as a worthwhile investment that will potentially generate two to three times its value in tax revenues within five years.