India ranks 9th globally in production and 7th in consumption of machine tools. The country is set to become a key player in the global machine tools industry and is likely to see substantial high-end machine tool manufacturing, even as China keeps its lead in lower-end machine tool volumes. Numerous international manufacturing firms have established joint ventures or wholly-owned subsidiaries in India to tap into this domestic demand and leverage India as a regional manufacturing hub.
Industry experts believe that the phenomenon is linked to the spurt in manufacturing, for which the machine tools sector serves as the mother industry. Since the manufacturing capacity is stagnating and the growth rate for the machine tools industry is falling in the developed economies, shifting machine tool capacity to low-cost high skill geographies like India, has become viable.
The industry can be segmented in several ways:
1. Based on how the metal is shaped, the industry can be classified into–metal cutting machines and metal forming machines. Metal cutting accounted for 87 percent of the total output of machine tools in India in 2007-08.
2. Based on how the tool selection/ movement is controlled, the industry can be classified into – CNC machines and conventional machines. CNC machine tools comprised nearly 60 percent of the total machine tools produced in 2007-08.
3. Based on the usage purpose, the industry can be classified into – general-purpose machines and special-purpose machines.
Although India’s domestic machine tool manufacturing sector has expanded significantly (producing over $1.4 billion worth of equipment annually), India remains a net importer, sourcing roughly 50% of its high-precision consumption requirements from abroad. Major suppliers include Japan, Germany, Italy, South Korea, China, and the United States. There are no policy restrictions on importing machine tool equipment into India. The Basic Customs Duty (BCD) on most standard machine tools is 7.5%.
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Last updated: August 3rd, 2026
