Polyacrylamide hydrogel with nickel nanoparticles (ferrogel) have received increasing attention because of their viability in magnetic biosensors, magnetic field sensitive transformers, field-assisted drug deliverers, strain sensors and wearable electronics etc. In traditional ferrogels, wear can destruct durability and magnetic sensitivity, which might make them inept for further functioning. In this work, carbon nanotubes (CNTs) were incorporated into polyacrylamide hydrogel embedded with nickel nanoparticles to obtain high magnetic sensitivity, strength and wear resistance. The incorporation of CNTs, offered an increase in saturation value of magnetic moment form 0.76 emu/g to 1.41 emu/g, i.e. an 85% increase was demonstrated, owing to the maximum grain refinement (28 nm) and spin transport-based magnetization in CNTs. The enriched magnetism of CNT added ferrogel is also linked to the increment in domain sizes (70–120 nm), domain wall width (40–80 nm) and magnetostatic energy (∼0.136 erg/cm2), calculated by using magnetic force microscopic data. Along with this, the wear rate is also demonstrated to have dropped ∼40% with the adding up CNTs into the ferrogel, due to the lubricity effect of CNTs as well as the synergistic effect created between Ni nano-particles and CNTs. Thus, CNT added ferrogel shows higher magnetism and limited wear damage and can be an advanced polymer composite for magnetic sensors and drug delivery applications.