Looking to empower jobs, precision tools, and India’s rise in global manufacturing, NITI Aayog charts a ₹80 billion blueprint to spark a $25 billion export surge of power and hand tools.
NITI Aayog has recommended a ₹80 billion bridge cost support scheme to enhance India’s export potential in the hand and power tools sector. The proposal, released in a report on Tuesday, also suggests reforms in labour laws, regulations, and infrastructure development via public-private partnerships.
Titled Unlocking $25+ Billion Export Potential – India’s Hand & Power Tools Sector, the report highlights India’s capability to increase its share in the $100 billion global market. It estimates potential exports of $25 billion over the next 10 years, creating up to 3.5 million jobs if India captures 10% of the global power tools market.
Currently, India’s presence is modest. Hand tool exports are just 1.8 per cent and power India’s current share in global hand and power tool exports is minimal—1.8% and 0.6% respectively. This places it well behind China and Taiwan, which command 46% of hand tool exports and 37% of power tools exports, as shown in the export distribution chart.
The European Union (excluding Germany) also holds a significant presence with 18% in hand tools and 22% in power tools, while Germany alone contributes 11% and 13% respectively. The United States, a major tool consumer, imports 21% of global hand tools and 22% of power tools, offering a prime target market for India’s exports.
India’s exports to the US grew from $130 million in 2019 to $250 million in 2022—a 24% increase, driven mainly by hand tools. However, this growth pales compared to Vietnam’s explosive 224% rise during the same period, from $35 million to $1.2 billion, showing how swiftly nations can scale when structural incentives align with industry readiness.
China, already the dominant player, posted only a 4% increase but still exported $7.6 billion worth of tools to the US in 2022 alone.
However, the growth potential is equally evident from the trade forecast charts in the report. The hand tools market is expected to rise from $34 billion in 2022 to $60 billion by 2035, at an annual growth rate of 4.5%.
The power tools market, more directly relevant to electronics, is projected to grow from $63 billion to $134 billion, including $53 billion in tool accessories, growing at 6% CAGR. This segment includes interchangeable tools—key in electronics assembly and maintenance—highlighting opportunities for localised production.
A 10% capture would benefit electronics companies through better tool availability, enhanced manufacturing precision, reduced import dependency, and cutting procurement and logistics costs.
However, this vision is not without challenges. India’s cost structure remains less competitive due to rigid labour regulations, inefficient land acquisition, and underdeveloped logistics.
Without reforms, Niti Aayog estimates that an additional ₹280 billion may be needed beyond the bridge support. Far from a subsidy, this may generate 2–3x returns in tax revenue within five years, making it an economically sound investment.
For electronics manufacturers, this emerging tooling ecosystem creates opportunities across the value chain. Companies can explore backwards integration by investing in or collaborating with tool manufacturers, co-developing specialised tools.
With rising geopolitical tensions and concerns over overdependence on Chinese imports, sourcing tools domestically adds strategic depth and supply chain resilience.
Furthermore, shared logistics hubs and export clusters under the proposed policy framework could allow bundling of electronics and tools for consolidated exports to high-demand markets like the US and the EU.
The road ahead depends on executing reforms, building infrastructure under public-private models, and fostering industry-government collaboration—but, according to NITI Aayog, the trajectory is promising and full of potential.
