Toy Association of India president, Ajay Agarwal stated that 3 years back 80% of the toys were imported and only 20% were from local manufacturers but now the situation has completely changed. He informed that imports have been reduced drastically by 70% and many toy manufacturers are importing only small components and assembling them in India. National toy policy and production-linked incentive (PLI) scheme will help India to increase its share in the global market. The toy industry has requested the government to set up a separate export promotion council for them. The Indian toy industry is only 0.5% of the global industry size and the sector is fragmented with 90% of the market being unorganised.
Market Segmentation of Toy Manufacturing Industry:
By Type of Toy:
- Electronic toys
- Construction toys
- Plush toys
- Pre-school toys
- Outdoor Play toys
- Activity toys
- Other toys.
By Distribution Channels:
- Speciality Stores
- Super Markets
- Street vendors
How India Is Reducing Dependence on China for Toys:
China has been the undisputed leader and it alone accounted for 70 per cent of India’s toy imports. For ages, “Made in China” has been synonymous with low-quality products as the focus has been on manufacturing cheap rather than quality goods in China. Hence Chinese toys were considered cheap quality and also found to be highly toxic for children since they contained heavy metals such as lead and compounds like phthalates. Since children spend a long time with toys, often chewing or mouthing them, India implemented a ban on Chinese plastic toys in 2009 for half a year after finding them to be unsafe for children.
India imposed the toy quality control order to improve the quality of Indian toys by making it mandatory to have an ISI mark for Indian toys to reduce the import of toxic toys from China. Additionally, the Indian government increased the import duty to 60% resulting in the import of toys into India reducing by 50%. Domestic toy manufacturing businesses have reported to the government that these policies have drastically increased their revenues.
Important Government Policies Boosting Toy Manufacturing Industry in India:
1. Product Specific Industrial Cluster Development Program:
For the creation of common facilities centre with machines, raw materials, skill development, design centres, Assistance is provided under the Scheme of Funds for Re-generation of Traditional Industries (SFURTI). 14 toy clusters have been approved and 8839 artisans benefitted by the scheme with as of December 2021 with an outlay of USD 5.4 mn.
Toy clusters are also getting support from the Ministry of Textiles in the area of marketing, technology and infrastructural support for the sustainable development of handicraft artisan has identified 13 toy clusters for the complete development of clusters.
India’s first toy cluster was developed in Koppal, Karnataka to provide state of the art industrial facilities with internal roads, water, power, and common facilities such as security, customs and a centre of excellence.
2. State incentives for toy manufacturing industries are:
- Capital subsidy
- Electrical duty exemption
- Stamp duty exemption
- Interest subsidy
- Tax reimbursement
3. Increasing custom duty on imported toys.
4. Mandating Bureau of Indian Standards certification for imports since January 2021.
5. Strict regulations on the sale of non-certified toys.
6. Issuance of quality control orders has reduced the import of toys drastically.
7. BCD on toys was increased to 60% from 20% in 2020 to encourage local toy manufacturing business.
8. To promote the domestic toy manufacturing business, BCD on toys was raised from 20% to 60% in February 2020.
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