Indian Toy Industry Sees 52% Drop in Imports and 239% Rise in Exports in FY 2022-23

GG News Bureau
New Delhi, 5th Jan. The Indian toy industry experienced significant growth in FY 2022-23 compared to FY 2014-15. Imports decreased by 52%, exports increased by 239%, and the overall quality of toys available in the domestic market improved. These observations were noted in a case study titled “Success Story of Made in India Toys” conducted by the Indian Institute of Management (IIM) Lucknow on behalf of the Department for Promotion of Industry and Internal Trade (DPIIT).

The report highlights that the government’s efforts have created a more favorable manufacturing environment for the Indian toy industry. Over a span of six years, from 2014 to 2020, these dedicated efforts led to a doubling of manufacturing units, a reduction in dependence on imported inputs from 33% to 12%, a 10% compound annual growth rate (CAGR) in gross sales value, and an overall increase in labor productivity.

The report also identifies India as an emerging top exporter in the global toy value chain, thanks to zero-duty market access for domestically manufactured toys in countries such as the UAE and Australia. To position India as a viable alternative to current toy hubs like China and Vietnam, the report emphasizes the need for consistent collaboration between the toy industry and the government. This collaboration should focus on technological advancements, embracing e-commerce, encouraging partnerships and exports, investing in brand-building, engaging with educators and parents, valuing cultural diversity, and collaborating with regional artisans.

To address these issues and foster growth in the Indian toy industry, a strategic plan of action is necessary. The government has already implemented several interventions and initiatives, including:

a) Formulating a comprehensive National Action Plan for Toys (NAPT) with 21 specific action points, implemented by 14 Central Ministries/Departments, with DPIIT as the coordinating body.

b) Increasing the Basic Customs Duty (BCD) on toys (HS code 9503) from 20% to 60% in February 2020, and subsequently to 70% in March 2023.

c) Mandating sample testing of each import consignment by the Directorate General of Foreign Trade (DGFT) to prevent the import of sub-standard toys.

d) Issuing a Quality Control Order (QCO) for Toys in 2020, effective from January 1, 2021.

e) Notifying special provisions by the Bureau of Indian Standards (BIS) to grant licenses to micro sale units manufacturing toys without a testing facility for one year, with the option to extend for three years without establishing an in-house testing facility.

f) Granting over 1200 licenses to domestic manufacturers and more than 30 licenses to foreign manufacturers by BIS for the manufacture of toys with BIS standard marks.

g) Adopting a cluster-based approach to support the domestic toy industry, with the Ministry of MSME supporting 19 toy clusters under the Scheme of Funds for the Regeneration of Traditional Industries (SFURTI), and the Ministry of Textiles providing designing and tooling support to 13 toy clusters.

h) Undertaking various promotional initiatives to promote indigenous toys and encourage innovation, such as The Indian Toy Fair 2021 and Toycathon.

In line with the report’s recommendations, the government has already taken measures under the NAPT.

Prime Minister Shri Narendra Modi expressed his desire to establish India as a global toy manufacturing hub during his “Mann ki Baat” address in August 2020. To achieve this vision, the government has implemented a comprehensive National Action Plan for Toys (NAPT) to promote toy design, use toys as learning resources, monitor toy quality, and promote indigenous toy clusters.

The government’s policy initiatives, combined with the efforts of domestic manufacturers, have led to remarkable growth in the Indian toy industry.