New Delhi, April 15 (IANS) India has the potential to capture a larger share of the global trade market for power and hand tools, targeting $25 billion in exports over the next decade, which could create approximately 35 lakh jobs by achieving a 10 per cent market share in power tools and 25 per cent in hand tools, a NITI Aayog report showed on Tuesday.
Through fostering innovation, empowering MSMEs and strengthening industrial ecosystem, the country can solidify its position as a reliable, high-quality global manufacturing hub, according to the report on the sector.
Launched by NITI Aayog Vice Chairman Suman Bery, the report outlined a strategic path for the sector to enhance its global competitiveness and capture a significantly larger share of the international market.
It suggested that the global trade market for power and hand tools, currently valued at approximately $100 billion, is projected to grow significantly, reaching around $190 billion by 2035.
Within this market, hand tools account for $34 billion and are expected to expand to $60 billion by 2035, while power tools, including tool accessories, represent $63 billion and are anticipated to surge to $134 billion, with electrical tools comprising the majority.
India currently exports $600 million in hand tools (1.8 per cent market share) and $470 million in power tools (0.7 per cent market share).
To achieve the potential of $25 billion in power and hand tool exports over the next decade, the report delved into the issues impacting hand and power tools sectors and recommends three key categories of interventions which are essential.
“Developing world-class hand tool clusters with advanced infrastructure is critical, requiring 3-4 clusters aggregating around 4,000 acres. These clusters operating under a public-private partnership (PPP) model would feature plug-and-play infrastructure, worker housing, and facilities like connectivity and convention centres to streamline operations,” said the report.
Addressing structural cost disadvantages through market reforms is necessary, including rationalising Quality Control Order (QCO) restrictions and import duties on essential raw materials like steel and machinery, simplifying the Export Promotion Capital Goods (EPCG) scheme by easing Authorised Economic Operator (AEO) requirements, and reducing penal provisions like interest on defaults.
Additionally, reforms to building regulations and labour laws are needed to enhance competitiveness.
Providing bridge cost support to offset cost disadvantages is crucial, though no additional support beyond existing schemes like Remission of Duties and Taxes on Exported Products (RoDTEP) and duty drawbacks is required if factor market interventions are effectively implemented, said the report.
However, the report estimates that in the absence of these reforms, an additional Rs 8,000 crore in bridge support will be necessary, which should be viewed as an investment rather than a subsidy, as it is expected to generate 2-3 times its value in tax revenue over the next five years.
–IANS
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