Reports & IndicesImportant2025-04-22

NITI Aayog Releases Hand and Power Tools Export Report

In News

What Happened

On April 22, 2025, NITI Aayog and the Foundation for Economic Development (FED) released a report titled 'Unlocking $25+ Billion Exports: India’s Hand & Power Tools Sector'. The report outlines a strategic roadmap to scale India's hand and power tool exports from current levels of approximately $1 billion to over $25 billion by 2035. It proposes creating large-scale manufacturing clusters and implementing market reforms to boost global competitiveness.

Why It Matters

This initiative aims to capitalize on the 'China Plus One' strategy, targeting a 25% global market share in hand tools and 10% in power tools. By expanding this labor-intensive sector, India has the potential to generate 3.5 million direct and indirect jobs, significantly boosting employment and strengthening its MSME ecosystem.

Background

History & Context

The global tools market, projected to reach $190 billion by 2035, is currently dominated by China, which holds a nearly 50% share compared to India's sub-2% share. Despite having a low-cost workforce and established MSME clusters in places like Punjab and Maharashtra, Indian manufacturers face a 14-17% structural cost disadvantage due to expensive raw materials, logistics bottlenecks, and lack of scale. Rising Chinese labor costs and international tariffs have now created a critical window of opportunity for India to capture global market share.

What Changed

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Export Volume and Market Share: BEFORE, India exported only $600 million in hand tools (1.8% global share) and $425 million in power tools (0.7% share). NOW, the roadmap targets $15 billion in hand tools (25% share) and $12 billion in power tools (10% share) by 2035.
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Manufacturing Infrastructure: BEFORE, production was largely fragmented across traditional, small-scale MSME clusters. NOW, the policy proposes building 3-4 mega manufacturing clusters spanning 4,000 acres with a cumulative government and industry investment of ₹57,000 crore.
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Policy and Financial Support: BEFORE, exporters relied on standard RoDTEP incentives (around 0.9-1.1%). NOW, the report recommends critical market reforms, including reducing import duties on raw materials and components, alongside a targeted ₹5,800 crore bridge support over five years.

Prelims Angle

NCERT Connection

This development directly connects to Class 12 Geography (India: People and Economy) Chapter 8 — 'Manufacturing Industries'. It highlights the spatial distribution of industries, the economic role of MSMEs, and the application of agglomeration economies through the proposed creation of massive manufacturing clusters to upgrade traditional industrial hubs like Jalandhar and Ludhiana.

Practice Questions

Q1

Correct Statement(s)

With reference to the NITI Aayog report 'Unlocking $25+ Billion Exports: India’s Hand & Power Tools Sector', consider the following statements: 1. The roadmap targets achieving a 25% global market share in hand tools and a 10% market share in power tools by 2035. 2. China currently controls approximately half of the global trade in the hand and power tools market. Which of the statements given above is/are correct?

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