Key Government Best Programs Supporting Industrial Tools & Manufacturing (as of 2025)

India’s manufacturing sector is rapidly transforming, fueled by innovation, self-reliance goals, and strong policy support. As of 2025, the Indian government continues to spearhead a series of high-impact programs to modernize industrial tools and boost manufacturing competitiveness.

Government Best Programs :

In this post, we explore the key government initiatives supporting industrial tools and manufacturing in India, backed by the latest data, eligibility details, impact analysis, and future outlook.

From Production-Linked Incentive (PLI) schemes to Skill India Mission and the Atmanirbhar Bharat Abhiyan, these initiatives have significantly improved India’s industrial ecosystem. Whether you’re an MSME owner, a large manufacturing enterprise, or an investor looking at India’s growth trajectory, understanding these programs is essential.

1. Make in India

Launched: 2014
Aim: Transform India into a global design and manufacturing hub

Key Features:

• Focus on 27 sectors including industrial machinery, electronics, and auto components
• Ease of Doing Business reforms: India jumped from 142 (2014) to 63 (2020) in global EODB ranking
• Simplified labor laws and faster FDI clearances

Achievements:

• Manufacturing contribution to GDP rose to 19.2% in FY 2024-25.
• India moved to 39th rank in the Global Innovation Index 2024.

Support to Tooling & Manufacturing Sector:

• FDI liberalization: 100% FDI allowed under automatic route.
• Setting up industrial corridors (e.g., DMIC, AMRUT).
• Export incentives and ease of business reforms.

2025 Highlights:

• Over ₹4 lakh crore investments committed under Make in India
• 60+ industrial corridors developed or under development
• Rise in domestic tool manufacturing: 30% increase since 2020

Make in India continues to be a major driver for domestic manufacturing tools and smart factory setups.

2. Production Linked Incentive (PLI) Schemes

Launched: 2020
Allocated Budget (2021–2025): ₹1.97 lakh crore
Focus Sectors: Electronics, medical devices, auto components, specialty steel, white goods, solar PV modules

Key Impacts:

• Targeted incentives of 4%–6% on incremental sales
• Directly benefitting tool manufacturers in precision machining, electronics assembly, and industrial automation

Latest Data (2025):

• 733 applications approved under PLI across 14 sectors
• Expected to generate ₹20 lakh crore in production
• Employment generation: Over 6 lakh jobs created

Sector Focus:

• Tool and die manufacturing: 35% growth in export demand
• MSME toolmakers are seeing inclusion through sub-vendor linkages

Sectoral Coverage:

• PLI for Large Scale Electronics Manufacturing (2020).
• PLI Scheme for Automobile and Auto Components (2021).
• PLI for Advanced Chemistry Cell Battery, Machine Tools, and White Goods.

Data Highlights:

• ₹2 lakh crore allocated by 2025.
• Tooling industry saw 18% YoY growth in 2024 due to PLI participation.

Benefits:

• Increased domestic capacity.
• Export promotion via local tool manufacturing.
• Technological upgradation incentives.

3. Atmanirbhar Bharat Abhiyan

Launched: 2020 (Post-COVID Economic Package)
Total Stimulus Announced: ₹20 lakh crore (~10% of GDP)

Pillars:

1. Economy
2. Infrastructure
3. System (Technology-driven)
4. Demography
5. Demand

Relevance to Industrial Tools:

• Push for import substitution in industrial components
• CAPEX incentives for local manufacturing of machinery and tools
• Public procurement policies favor Indian-made tools (up to ₹200 crore)

2025 Snapshot:

• 70% of industrial tools used in Indian government projects are now domestically sourced
• Tax incentives for local tool exporters extended through FY 2026

Tools & Manufacturing Impact:

• ₹20,000 crore subordinate debt for stressed MSMEs.
• Capital infusion for technology upgradation in toolmaking clusters.
• Incentives for local design, prototyping, and industrial R&D.

Schemes Under Atmanirbhar Bharat:

• Fund of Funds for MSMEs.
• Champion Sector Scheme (includes industrial tools).

4. Skill India Mission

Launched: 2015
Governing Body: National Skill Development Corporation (NSDC)

Key Programs:

• PMKVY (Pradhan Mantri Kaushal Vikas Yojana)
• National Apprenticeship Promotion Scheme (NAPS)

Relevance to Tool Industry:

• Certified training for CNC operators, die makers, machinists, quality inspectors
• Over 1 crore youth trained in manufacturing-related trades since 2016

2025 Progress:

• 2,500+ ITIs upgraded with industry-grade tooling equipment
• Dual training system aligned with industry needs for smart manufacturing

5. MSME Support Schemes

MSME Technology Centres (Tool Rooms):

• 18+ operational across India (Ahmedabad, Bhopal, Kolkata, etc.).
• Provide skill training, tool design, CAD/CAM support.

Cluster Development:

• Common Facility Centers (CFCs) with advanced machining tools.
• Grants up to 90% for technology and infrastructure development.

Support Programs:

• Credit Linked Capital Subsidy Scheme (CLCSS).
• Technology and Quality Upgradation Support to MSMEs (TEQUP).

Key Schemes:

• Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
• Technology and Quality Upgradation Scheme (TEQUP)
• Cluster Development Program

2025 Highlights:

• ₹10,000 crore disbursed for tool modernization in MSMEs
• Interest subsidies for automation adoption
• 110 new tool rooms set up in regional clusters

Impact:

• Empowering small manufacturers to adopt CNC tools, digital metrology systems, robotic arms
• Tool exports from MSME sector increased by 28% YoY (2024–25)

6. Digital India & Smart Manufacturing

Goal: Digitize operations, support Industry 4.0

Key Initiatives:

• Samarth Udyog Bharat 4.0: Smart automation centers in Pune, Coimbatore, Bengaluru
• IoT & AI integration in tool monitoring
• Paperless trade & e-procurement systems

2025 Outlook:

• Over 5,000 industries integrated with digital tooling systems
• 300% increase in adoption of smart sensors and tool diagnostics since 2022

7. National Infrastructure Pipeline (NIP) & Gati Shakti Mission

Budget: ₹111 lakh crore (NIP till 2025)
Gati Shakti: Unified multi-modal connectivity for industrial efficiency

Relevance:

• Improved logistics for tool supply chains
• 24×7 manufacturing zones with reliable utilities
• Dedicated Freight Corridors speeding up tool transport

2025 Achievements:

• 35 logistics parks operational
• 11 industrial corridors running efficiently
• Boosted B2B tool delivery efficiency by 40%

8. SAMARTH Udyog Bharat 4.0

Objective:

• Facilitate Industry 4.0 adoption in manufacturing.
• Promote smart factories and automation.

Key Actions:

• Establishment of 25+ Smart Manufacturing Innovation Centers by 2025.
• Training 1 million+ workers in digital tools and robotics.

Impact on Tools Sector:

• Grants for CNC, AI-based systems in tool making.
• Collaborative platforms between academia and tool manufacturers.

9. National Manufacturing Policy (NMP) & Industrial Corridors

NMP Target: Raise manufacturing share in GDP to 25% by 2025
Policy Tools:

• National Investment and Manufacturing Zones (NIMZs)
• Special economic zones for tool and machinery production

Progress:

• Tool clusters in Gujarat, Tamil Nadu, Maharashtra flourishing
• Industrial parks with plug-and-play facilities for tool startups

2025 Forecast:

• Over 15 million direct and indirect jobs created
• ₹1.2 lakh crore in FDI attracted through these corridors

10. Startup India and Innovation Missions

Startup India:

• ₹10,000 crore Fund of Funds.
• Support for industrial automation, 3D printing, and precision tools startups.

Atal Innovation Mission:

• 70+ Atal Incubation Centres (AICs) supporting hardware startups.
• AIM iCreate Program focused on prototyping for industrial design.

11. National Capital Goods Policy

Goals:

• Enhance domestic production of capital goods and tools.
• Target: Increase production from $35 Bn (2024) to $100 Bn by 2025.

Key Measures:

• Skill development through NSDC.
• Import reduction through domestic tool manufacturing capabilities.
• Preference to domestically manufactured capital goods in procurement.

12. Key Budget 2024-25 Announcements

Direct Allocation:

• ₹10,000 crore to capital goods sector including toolmaking clusters.
• ₹2,200 crore for electronics manufacturing and PCB tooling.

Tax and Regulatory Support:

• 15% corporate tax for new manufacturing units until March 2025.
• Relaxation in compliance and faster refund of GST input.

13. Skill India and Industrial Training Support

Importance of Skilled Workforce:

• Tools and precision manufacturing needs trained labor.

Schemes:

• PMKVY 4.0: Over 1 crore youth trained by 2025.
• Dual System of Training (DST) for ITIs with industry participation.

Industry-Academia Initiatives:

• MoUs with Siemens, Bosch, and other tool manufacturers for practical skill development.

14. Export Promotion & Ease of Doing Business Reforms

EPCG and MEIS Support:

• Capital goods export incentives and zero-duty import licenses.
• Special incentives for tool manufacturers with export orders.

India’s Rise in Rankings:

• World Bank’s Ease of Doing Business: India ranks 58th in 2024.
• New single-window clearance system reduces licensing time by 30%.

Data Summary Table

Conclusion & Future Outlook (2025–2030)

• Summary of impactful policies and growth data.
• How India’s tooling and manufacturing ecosystem is evolving.
• Expected rise in high-tech tool exports.
• Global investment trends and India’s role as a manufacturing hub.

With robust government programs and industry-focused policies, India is clearly poised to become a global manufacturing powerhouse. The continued investments in tooling infrastructure, digital integration, skilled manpower, and local manufacturing ecosystems have transformed the industrial landscape.

In 2025 and beyond, sectors like aerospace, automotive, electronics, and defense will thrive with the support of these initiatives. For entrepreneurs, toolmakers, and global investors, India offers not just opportunity—but a reliable policy ecosystem to grow in.

If you’re planning to invest in industrial tools or scale your manufacturing capabilities, aligning with these government schemes can be a game-changing move.

Dinesh Patel

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