Description

The NITI Aayog has unveiled a comprehensive report titled "Unlocking $25+ Billion Export Potential: India’s Hand & Power Tools Sector", highlighting the immense growth opportunities and strategic importance of this industry. The report presents a roadmap to elevate India’s position in the global market by addressing existing challenges and implementing focused interventions.

Global Market Trends

Currently, the global hand and power tools industry is valued at $100 billion and is projected to reach $190 billion by 2035.

• Hand tools contribute around $34 billion, with expected growth to $60 billion.

• Power tools represent $63 billion, anticipated to rise to $134 billion.

At present, China dominates this market segment with a major share in both categories.

India’s Current Standing

India’s participation in this global market remains limited.

• Hand tool exports total around $600 million, accounting for 1.8% of the global share.

• Power tool exports amount to $470 million, representing 0.7% of the market.

However, the NITI Aayog report indicates that with strategic planning, India could unlock a $25 billion export potential over the next decade.

Potential For Job Creation

If India succeeds in capturing a 10% share in power tools and 25% in hand tools, the sector could generate approximately 3.5 million employment opportunities, significantly boosting the nation's workforce and industrial growth.

Barriers To Competitiveness

Despite its potential, India faces a 14–17% cost disadvantage compared to China, driven by several factors:

• Higher costs of raw materials

• Lower workforce productivity

• Elevated logistics expenses

• Smaller-scale operations
  These structural inefficiencies hamper India’s ability to compete on a global scale.

Key Recommendations By NITI Aayog

To address these challenges and improve competitiveness, the report proposes a three-pronged strategy:

Establishing Manufacturing Clusters

• Develop 3–4 state-of-the-art manufacturing hubs under a public-private partnership model

• Provide modern infrastructure, worker accommodations, and plug-and-play facilities

Reducing Structural Costs

• Reform Quality Control Orders (QCOs) and import tariffs on raw materials

• Streamline the Export Promotion Capital Goods (EPCG) scheme

• Update labour regulations to better suit industrial needs

Offering Transitional Cost Support

• Introduce targeted financial aid to offset current cost disadvantages

• An estimated investment of Rupees 8,000 crore may be required, which could be recovered through increased tax revenues over time

Strategic Significance For India Economic Vision

The hand and power tools sector forms a core part of the global manufacturing supply chain. Strengthening this industry aligns with India’s goals under the ‘Make in India’ initiative and supports its long-term vision of becoming a developed economy by 2047. By fostering growth in this sector, India can establish itself as a reliable global manufacturing hub.

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