Draft Detailed Project Report

Technology Centre Systems Program – Draft DPR for New TC at Rohtak
market size of the ~6,000 crores (in year 2011) is the immediate low hanging fruit which can be
addressed by MSME TCs by supporting Commercial Tool Rooms. It has been observed that
Commercial Tool Rooms have insufficient capacity that leads to an increase in lead time for
manufacturing of tools.
Imports: Imports account for ~ 31% of the
total tooling market which is around INR
4,000 crores. As per TAGMA report and our
discussions with some of the Private Tool
Rooms, key reasons for tooling imports are;
Figure 11: Composition of imports segment
► Quality: Better surface finish, lower
turnaround time and higher degree of
accuracy by ability to meet the
tolerance range.
► Capacity: Insufficient capacity of Indian tool rooms to meet domestic demand and lack of
infrastructure to make certain types of tools also results into imports.
► Cost: Higher price, non-availability of materials at par with the international standards, use of
out dated technology due to absence of advance machinery compromises the quality of
commercial tool rooms leading to demand for imports. In Countries like China and Taiwan, the
tooling cost is lower than India.
► Design: International companies based in India prefer procurement of their tooling from their
parent company to maintain design standards across the globe e.g. LG & Samsung import most
of their tooling from Korea.
Auto OEMs and components segment account for around 75% of the total imports in tooling.
International companies like Volkswagen, General Motors and Siemens etc. still prefer international
tool makers for superior quality. The rest 25 % i.e. accounts for tooling requirements from other
sectors which can be addressed by MSME Tool Rooms. This pushes the customers to look outward to
fulfil their requirements.
Total addressable market for MSME Tool Rooms is about INR 7,000 crores (6,000 for Commercial
Tool Rooms + 1,000 crores imports, especially those imports which take place as a result of
insufficient capacity of domestic Commercial Tool Rooms.
To start with, the primary focus could be addressing the capacity constraint in the domestic tool room
industry in the short run. However, a focused approach towards specialised tool production in the
long run can help capture a part of imports which is being replaced by domestic supply from
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