India’s ambition to become a global manufacturing hub depends heavily on the strength of its domestic capital goods sector. The Make in India initiative is a key driver to position the country as a centre for design and manufacturing across multiple industries. While areas such as heavy engineering, machine tools, and automobiles often take the spotlight, the tools industry remains overlooked despite its vital role.
Tools are essential not only in manufacturing but also in activities such as drilling, cutting, sanding, and polishing. Their use spans industrial applications as well as everyday life.
In today’s spotlight, we explore India’s hand and power tools market, the government’s ambitious export targets, and the opportunities for investment.
Current State of India’s Hand and Power Tools Market
According to the IMARC Group, the hand tools market in India was valued at $825.53 million in 2024 and is projected to grow to $1,222.98 million by 2033, registering a CAGR of 4.12% between 2025 and 2033.
In India, the power tools market is valued at about Rs 110 billion and is expected to grow at 7% in the coming year, as highlighted in Bosch Ltd’s annual report.
Globally, the trade in hand and power tools stands at around $100 billion and is projected to reach approximately $190 billion by 2035. Within this, hand tools are expected to expand from $34 billion to $60 billion, while power tools (including accessories) are set to grow from $63 billion to $134 billion.
India’s Tool Industry Exports
India’s export performance in tools varies across segments. In hand tools, the country holds 4.6% of the global spanner and wrench market, while its share in other products ranges between 0.6% and 3%. In power tools, India accounts for 2.4% of pneumatic tools and 2.9% of soldering and welding machines, while shares in other categories remain much lower.
Globally, China dominates with $16 billion worth of hand tools and $22 billion of power tools exports. India, in comparison, lags behind at $600 million and $425 million, representing just 1.8% and 0.7% respectively.
The global tools trade was valued at $100 billion in 2022 and is projected to reach $190 billion by 2035. Trade shifts, such as US tariffs on Chinese goods between 2016 and 2019, created opportunities. Yet, India’s exports grew modestly at around 25%. China and Taiwan together account for 46% of hand tools and 37% of power tools exports, while the EU contributes 18% and 22%. This highlights India’s relatively small share but also its significant scope for expansion.
Growth Triggers for the Tool Industry
Geopolitical Opportunities: Global efforts to reduce dependence on China, coupled with US tariffs on Chinese tools, have opened doors for Indian exports. However, India needs to move faster, as Vietnam’s export growth has outpaced India’s in recent years.
Cost Advantage: Labour costs in India average about $1 per hour compared to $3 in China. Since labour accounts for nearly 15% of hand tool production costs, this gives India a natural advantage.
Automotive Synergies: India’s automobile industry supports forging, stamping, and casting processes that are also critical for tool production. Rising demand from sectors such as automotive, aerospace, and infrastructure is driving the need for precision tools.
Global Standards: Indian manufacturers already meet international benchmarks and export to Europe. For instance, spanners and wrenches from India hold a 5% share of global trade, a small but positive sign of the industry’s potential.
Challenges Facing the Tool Industry
Despite its strengths, India’s tool sector continues to face several challenges:
Cost Competitiveness: Production costs in India are 14–17% higher than in China, mainly due to expensive raw materials like steel, plastic, and motors, coupled with high taxes, interest rates, and limited economies of scale.
Limited Technical Know-how: Weak R&D capabilities force India to import high-value components such as ratchets from China. This raises costs and prevents the country from capturing more of the value chain.
Expansion Constraints: High land prices and capital requirements, particularly in Punjab where most production is concentrated, make it difficult to scale up operations or establish new factories.
Lack of Diversification: Tool manufacturing is concentrated in Punjab, Maharashtra, and Rajasthan, with Punjab alone contributing 80% of exports. This restricts balanced growth across the country.
Stocks to Add to Watchlist
The listed companies’ exposure to India’s tools industry is limited. Bosch Ltd, Taparia Tools Ltd, and Tata Steel, through its Tata Agrico division, are among the few listed players.
In power tools, unlisted companies such as Stanley Black & Decker and Groz Engineering dominate with nearly 45% market share.
In hand tools, unlisted players like Groz Engineering, JK Files, Shiv Forgings, Gardex, and HR International lead the space. The top seven companies together contribute about 25% of India’s exports.
What’s Next?
India has an opportunity to secure a bigger slice of the global tools market by addressing cost competitiveness and scaling up production. By 2035, the country aims to capture 25% of the global hand tools market, unlocking $15 billion in exports and creating around 2.5 million jobs. In power tools, the target is a 10% share with $12 billion in exports and 1.3 million jobs.
The hand tools segment already benefits from India’s labour cost advantage and a strong MSME ecosystem. Although China maintains dominance through its cost efficiency, shifting geopolitics, the Make in India push, and government export targets create a strong window of opportunity. With greater government support, India’s tool industry is well-positioned to strengthen its presence in the global market.
*The companies mentioned in the article are for information purposes only. This is not investment advice.
*Disclaimer: Teji Mandi Disclaimer
