Can India Challenge China in the USD 190B Global Tools Market by 2035?

In a fast-evolving global market, one sector stands poised for significant growth, and India could be on the verge of capturing a much larger slice of the pie. According to a recent report by Niti Aayog, the global hand and power tools market is projected to nearly double from its current value of USD 100 billion to USD 190 billion by 2035. India, with its burgeoning manufacturing capabilities and workforce potential, could emerge as a major player in this sector.

This dramatic expansion opens up tremendous opportunities for India. The country’s hand tools market, currently valued at USD 34 billion, is expected to surge to USD 60 billion, while the power tools segment—along with its accessories—will grow from USD 63 billion to USD 134 billion. Within this space, electrical tools are expected to dominate the power tools sector.

China's Dominance and India's Potential for Growth

At present, China leads the charge in global exports, holding a commanding 50% share in hand tools (USD 13 billion) and 40% share in power tools (USD 22 billion). India, on the other hand, exports far less, with hand tools accounting for just USD 600 million (1.8% market share) and power tools at USD 470 million (0.7% share). These numbers, while modest in comparison to China’s dominance, do not reflect the true potential of India’s market position.

The Niti Aayog report is optimistic about India’s ability to expand its footprint significantly. It suggests that with a concerted effort, India can increase its share to 25% in hand tools and 10% in power tools, boosting exports to a robust USD 25 billion over the next decade. This expansion could have far-reaching implications for the country’s economy, potentially creating around 3.5 million (35 lakh) new jobs, which would serve as a key driver of industrial growth and further bolster India’s manufacturing base.

The Roadblocks to Overcome

Despite this promising outlook, there are several obstacles standing in the way of India achieving this ambitious growth target. The report highlights a 14–17% cost disadvantage compared to China, a significant gap that could hinder the country’s competitiveness in the global market. The primary reasons for this disadvantage include the high cost of raw materials, such as steel, plastic, and electric motors, combined with relatively lower labor productivity. Factors like stringent wage regulations and high overtime costs contribute to the challenge.

Additionally, the logistical costs, especially from India’s landlocked states to ports, remain a major hurdle. These costs further strain the competitiveness of Indian manufacturers, adding another layer of difficulty in meeting global demands.

Nevertheless, the Niti Aayog report emphasizes that the tools industry is a "foundational pillar" of the global manufacturing ecosystem. With the rising demand from construction and DIY markets worldwide, the hand and power tools sector holds significant promise. It is not just a sector of economic importance but one that could become a catalyst for India’s ambitions under the “Make in India” initiative.

A Strategic Imperative for India's Future

India’s push to become a global manufacturing hub is tied to the strength of its industrial sectors, and the tools industry is seen as a crucial player in this strategy. The Niti Aayog report states, “India stands at the cusp of becoming a developed nation,” and stresses the importance of the hand and power tools sector in strengthening both the domestic manufacturing base and the country's global footprint.

The potential to grow within this sector aligns with India’s broader goals of economic diversification, job creation, and industrial growth. By focusing on the hand and power tools industry, India can position itself as a competitive force on the global stage, driving forward the manufacturing ambitions that have been the cornerstone of economic policy for years.

Looking Forward: The Need for Policy Intervention

While the path to realizing this growth potential is clear, it is not without challenges. To overcome the cost disadvantages and infrastructure bottlenecks, there is a pressing need for focused policy interventions. These could include measures to streamline logistics, reduce material costs, and improve labor productivity through better training and working conditions.

The tools industry’s significance also extends beyond just economic factors. It plays a vital role in shaping India’s image as a manufacturing powerhouse. By addressing these challenges and capitalizing on the rapid global demand for tools, India could unlock immense potential, not just for the sector itself, but for its entire industrial ecosystem.

The Niti Aayog report paints a picture of an industry on the brink of significant growth, urging the government, industries, and entrepreneurs to work together in seizing this moment. As India strives to make its mark on the global stage, the hand and power tools sector could be one of the key sectors driving this transformation—shaping not just the future of manufacturing, but the future of the nation itself.