Handtool is Punjab's new industry

Region accounts for 80% of the country total exports; Exports can witness more growth: Experts

The handtool industry in Punjab has been witnessing good export growth over the years and accounts for about 80 per cent of the hand tool exports from the country.

However, industry experts feel if certain measures are taken, the exports can witness threefold growth in the next five years. Of the global market of over $10 billion for hand tools, India's share is less than 2 per cent.

As per the data available on exports from the RBI, Chandigarh, handtool exports from Punjab have grown to Rs 331.5 crore during the period April-September 2005, from Rs 235.5 crore during the corresponding period in 2004-05, witnessing a growth rate of over 40 per cent.

Experts say for 2005-06, the figure from Punjab could come out to be about Rs 650 crore and over Rs 800 crore from the country. The exports from the Punjab region, compared with the total exports in the handtool industry have fluctuated from 70-80 per cent every year and both have witnessed a growth of about 20-25 per cent every year.

Speaking to Business Standard, Sharad Aggarwal, chairman, All India HandTool Panel of Engineering Export Promotion Council of India (EEPC), said, "Almost 80 per cent of the total exports from India in the hand tools are from Jalandhar and Ludhiana in Punjab. Though the exports are witnessing growth, there is a huge potential for its growth. If we compare with China, it exports hand tools worth about Rs 15,000 crore every year, which is about 18-20 times of the total hand tools exported from India.

In many countries like Germany, Spain, Japan and UK, hand tool business has been completely closed. We need to capitalise on this opportunity of exporting to these countries. Currently, 50 per cent of our exports fall into US and European market. At present, the industry is also facing the brunt of rising input costs to about 15-20 per cent due to increase in the prices of steel, oil and lack of continuous electricity supply."

Aggarwal further says that to achieve this huge export potential, there is a need to take certain measures like enhancing the subsidy limit under credit linked capital investment subsidy scheme from Rs 1-5 crore. The subsidy on cutting edge technology should also be increased from 15 to 25 per cent on the lines of textile industry. Besides that, credit should be made avaialble at cheaper rates and GST should be implemented at the earliest as this would bring down the taxation level to 15-17 per cent from the current 40 per cent level.

"The industry also needs a HandTool Industrial Estate, which should be set up exclusively for the hand tool units, a testing house should be set in the region and labour laws for small entrepreneurs should be made more friendly. The Central Institute of Hand Tools should be upgraded and equipped with the latest hand tool manufacturing technology. It also needs to have a separate budget of research and development."

The exports from Punjab for the year 2004-05 stood at Rs 561 crore, out of the total Indian exports of Rs 760 crore in the same year. For 2002-03, Punjab exports were Rs 395 crore, out of the total Indian exports of Rs 517 crore. Hand tool exports constitutes about 7-8 per cent share of total goods exported from Punjab.

Talking about the three year UNIDO project which is scheduled to be completed in December 2006, he says that it would help the units in upgrading technology and maintaining energy efficiency. There is a further need to better raw material realisation and training of workers, design of improved furnaces, energy audits, consultancy and training in electroplating, consultancy and training in marketing, BIS marking of products, ISO certification for the growth of exports from Punjab.