Niti Aayog eyes $25 billion exports of hand and power tools by 2035 | Mint

New Delhi: The federal policy think tank Niti Aayog on Tuesday laid down a road map to increase India’s exports of hand and power tools to over $25 billion by 2035 from $1 billion in 2025.

The plan proposed by Niti Aayog and the Foundation for Economic Development (FED) involves creating manufacturing clusters for such tools across the country, bolstered by a cumulative ₹57,000 crore investment by government and industry, as per a Niti Aayog press statement.

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The goods included in this plan include wrenches, pliers, screwdrivers and drills, among others. The report also stated that the target of over $25 billion in exports over the next decade is possible by targeting a 10% market share of power tools exports and a 25% market share of hand tools exports. 

The Niti Aayog report said India has a comparative advantage over China in exporting these goods, as the US, one of the largest importers of these goods, has levied heavy tariffs on Chinese hand and power tools.

India’s position in the global tool market is currently overshadowed by China, which controls about half of the world’s trade in hand and power tools. 

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While Chinese hand and power tool exports account for about $16 billion annually—roughly 50% of the market—India’s share in the global export market is marginal, illustrated by a market share of 1.8% of all hand tools and 0.8% of all power tools.

However, the study published by Niti Aayog and FED suggested that the wave of Chinese tools exports, which benefited from the country’s cost advantage, is likely to hit a trough in the near future, mainly due to tariffs and rising labour costs. The April 2025 report said these conditions would aid India’s position in the global export market for hand and power tools.

Over the last three weeks, US President Donald Trump and China have engaged in a battle of retaliatory tariffs. On 16 April, the US imposed 245% tariffs on Chinese goods, following a tussle in which both sides continued hiking tariffs against each other.

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Experts said India could benefit from such conditions with its existing tool exporting hubs in Punjab and Maharashtra.

Rahul Ahluwalia, founding director of FED, explained that India’s tool production is driven by the massive supply of labour in the country, and a targeted focus on developing this industry would generate millions of jobs. 

“The main reason the hand and power tools sector is important because it is relatively labour-intensive. And there is a pretty large export market we can get. We already have a competitive ecosystem in India doing a few hundred million dollars of exports. If we play our cards right, we can increase that to $25 billion,” said Ahluwalia.

But bringing this plan to fruition would be an uphill task, the report stated. India’s 14-17%  cost disadvantage compared to China is a massive challenge to overcome. Additionally, Indian manufacturers fall behind in the technical know-how necessary for a robust manufacturing ecosystem. Land availability for manufacturing such tools, as well as government support through various schemes, is limited, the report said. 

Building manufacturing clusters in public-private partnership models and employing a plug-and-play model in these hubs is a key part of the roadmap towards increasing India’s hand and power tools exports. The report stated a plan to build 3–4 clusters spanning about 4,000 acres by 2035. 

Market reforms, including reducing import duties and other import restrictions on raw materials and machinery, would also help bolster domestic manufacturers.

The report also recommended a bridge support of ₹5,800 crore over five years as market reforms take shape.