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Indian Hand Tools Market – Changing Landscapes and Niche Opportunities

The Indian hand tool market is estimated at around 200Mln US$, growing at around 12% p.a. Some of the highlights of this sector are;

  • The hand tool industry is labor and energy intensive
  • India’s competitive advantage is because of low labor cost and availability of raw material
  • There are an estimated 2500 manufacturers in India-out of which 95% are in small scale sector.
  • The type of products being manufactured are – General Purpose (Spanners & Wrenches, screwdrivers, Pliers , Sockets etc), Agriculture & Garden Tools (Spade, Shovels etc), Goldsmith tools & Watchmaker tools
  • The major manufacturing clusters are- Ludhiana in Punjab. There are a few manufacturers around Delhi and Mumbai as well.
  • The small scale units give a run for money to the larger players. And the unbranded segment has 50% of the market share.
  • Only a few industries and Original Equipment Manufacturers (OEMs) are brand conscious
  • End users buy tools individually and not in packs/ bundles
  • Imports from China are also rampant in the market
  • Organized manufacturers also have a parallel distribution to sell in unbranded market
  • The sales of tool storage devices are low as customers get them tailor made by local fabricators.
  • There are a few exclusive dealers. Most of them sell multiple brands (maybe not competing products- i.e. hand tools and power tools)

Some of the upcoming trends in this market are:

  • Technological up-gradation in the automobiles being manufactured in India requires sophisticated tools and equipment. Moreover maintenance level of these new generation vehicles is also reducing
  • Growing preference of power tools over hand tools by automotive garages, especially new ones.
  • Some of the promising sectors which need better quality products are De-fence, Railways, Automobile and Aerospace. However for tapping these sectors, one needs to have the right distributor network in place.
  • The larger organized players are expanding their sales team
  • Some companies have started doing e-selling, however the proportion of sales is still very small (2%)
  • Organized players have launched Home Tool kit catering to household sector
  • Some of the small scale manufacturers have upgraded themselves and are now competing with established organized players.

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Kuldeep Bhardwaj

About The Author

Kuldeep Bhardwaj, Cofounder & Director-Business Development at Expand in India is an FMS-Delhi alumni having more than 20 years of experience in running businesses for Global and Indian Firms. He has been involved with the Industrial Tools Industry for the last 8 years.

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