China’s woes offer India a chance in $100 billion global tools market: Niti Aayog

India’s tiny share of the global tools trade can be scaled up substantially with dominant market leader China struggling with tariffs and increasing costs, according to a report from central government think tank Niti Aayog released on Tuesday.

India can build a $25-billion export-driven tools industry by 2035 while overcoming structural barriers and cost disadvantages with the right mix of bold policy reforms, global-scale manufacturing clusters, and public-private collaboration, the think tank said in the report. The tools industry comprises essential hand-held equipment used across industries for tasks like drilling, cutting, and fastening, supporting both industrial and everyday applications.

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Niti Aayog’s report—Unlocking $25+ Billion Exports: India’s Hand & Power Tools Sector—prepared in collaboration with the Foundation of Economic Development, highlights India’s untapped potential in tools exports while underlining unique strengths like low-cost labour, a growing manufacturing base, and strategic trade positioning.

“While the global trade market for tools stands at about $100 billion in 2022, projected to reach $190 billion by 2035, India’s share remains a fraction, with exports of $600 million in hand tools and $425 million in power tools,” the report said.

“China’s near 50% market dominance underscores the scale of the challenge, yet recent shifts, such as tariffs on Chinese goods and rising costs, offer India a rare window to redefine its role,” it added.

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To be sure, China leads the global tools industry with its large-scale manufacturing, advanced technical expertise, and cost-efficient supply chains. Its dominance is reinforced by strong infrastructure and deep integration into global markets, making it the primary exporter of industrial and consumer tools worldwide.

Reforms, clusters to drive $25 bn tools push

In its report, Niti Aayog recommends creating a competitive ecosystem to enable India’s tools industry to overcome cost, skill, and infrastructure gaps, and compete effectively globally.

“Through this report, we propose a strategic framework anchored in three pillars: building world-class industrial clusters, reforming structural cost barriers, and providing targeted support where needed,” it said. “These interventions, developed with inputs from global best practices and local realities, aim to bridge the 14-17% cost gap with competitors and position India as a hub for high-quality, cost-effective tools.”

Further, Niti Aayog argues in its report that the tools industry is not merely an economic lever; it is a catalyst for inclusive growth, empowering small and medium enterprises and regions like Punjab and Maharashtra.

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“India stands at a defining juncture in its economic journey, poised to harness its latent potential and emerge as a global leader in manufacturing and trade,” it said.

The tools industry—spanning hand and power tools—is a vital but underutilized driver of growth, essential to manufacturing across sectors like infrastructure and automotive, and key to unlocking substantial economic value, Niti Aayog added in the report.