Commenting on the total tooling demand expectations over the next five years, the report said: “Indian tool room industry is estimated to grow to Rs 25,000 crore to Rs 26,000 crore in value by 2025 on back of strong growth in key end user segments.”(Harikrishna Katragadda/ MINT (Representative Image))
Commenting on the total tooling demand expectations over the next five years, the report said: “Indian tool room industry is estimated to grow to Rs 25,000 crore to Rs 26,000 crore in value by 2025 on back of strong growth in key end user segments.”(Harikrishna Katragadda/ MINT (Representative Image))

Indian Tooling Industry value to rise to Rs 26,000 crore by 2025: Report

As per the report, the market size of tool room industry in India is estimated to be around Rs 18,000 crore with around 70% of demand being met domestically and approximately 30% from imports.
New Delhi | By Press Trust of India | Posted by Nilavro Ghosh
PUBLISHED ON DEC 08, 2020 03:51 PM IST

Indian tooling industry is estimated to grow up to Rs 26,000 crore in value by 2025 on back of strong growth in key end-user segments but government support and intervention is required on many forefronts to augment tooling ecosystem in India, according to a report by NRI Consulting and TAGMA.

Inverted duty structure, challenges in access to finance and lack of skilled workforce are some of the key challenges ahead of the industry and it needs government support to address these hurdles, said the Indian Tool Room Industry by Nomura Research Institute Consulting & Solutions India Pvt. Ltd (NRI Consulting) and TAGMA (Tool and Gauge Manufacturers Association).

As per the report, the market size of tool room industry in India is estimated to be around Rs 18,000 crore with around 70% of demand being met domestically and approximately 30% from imports.

It further said that tooling imports into India are about five times the exports from the country by value with China and Korea accounting for almost 40% of the total tooling imports. Captive tooling supply has not changed much in the last two years but imports have captured a larger portion of incremental demand than commercial tool rooms.

Commenting on the total tooling demand expectations over the next five years, the report said: “Indian tool room industry is estimated to grow to Rs 25,000 crore to Rs 26,000 crore in value by 2025 on back of strong growth in key end user segments.”

As per the report, in terms of key end-users of the Indian tool room industry, the automotive segment is expected to grow 8%, consumer durables 9%, plastics 12%, electronics 14% and electrical by 21% over the next five years.

Calling for government intervention, the report said rationalisation of duty structure is needed to ensure imported finished tools incur more duty than imported raw materials and standard components.

Also, reduction in import duty on raw materials and components will aid in enhanced cost competitiveness, it said adding concession in import duty (around 8%) or complete waiver on machinery required for press tools will be of immense help to tool rooms.

“Such a provision already exists for plastic injection moulding machines,” it said.

In order to address the challenges in access to finance by the industry players, the report said tools, dies and moulds need to be recognised as priority sectors for lending at low interest rates at around 2-3%.

Besides, there is a need for special consideration on quick and easy access to availing of formal credit from organised channels without pledging of property as collaterals and repayment terms should be more flexible with the option of deferred payback period in case of prolonged demand slowdown such as the current scenario.

It also suggested waiver for the requirement of owned premises for granting loans for small and medium size tool rooms.

On the issue of lack of skilled manpower, the report by NRI Consulting and TAGMA highlighted the need for revising curriculum in tool training institutes and introducing advanced courses on tool engineering.

While suggesting technical tie up and collaboration with overseas tool rooms/training institutes for sharing knowledge and best practices, the report also called for setting up dedicated R&D institutes specific to the die and moulds sector and incentivising R&D spend in tool rooms.

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