Govt. efforts lead to doubling of manufacturing units, reduction in imported inputs, increase in gross sales value
GN Bureau | January 4, 2024
The Indian toy industry has witnessed remarkable growth over the past decade. Between FY 2014-15 and FY 2022-23, imports have declined by 52%, there was a rise in exports by 239% and there has been improvement of overall quality of the toys available in the domestic market. These observations have been noted in a case study on “Success Story of Made in India Toys”, conducted by the Indian Institute of Management (IIM) Lucknow at the behest of Department for Promotion of Industry and Internal Trade (DPIIT).
The report states that the government efforts have enabled in creation of a more conducive manufacturing ecosystem for the Indian toy industry. It highlighted that in a span of six years, from 2014 to 2020, these dedicated efforts led to the doubling of the number of manufacturing units, reduction in dependence on imported inputs from 33% to 12%, increase in gross sales value by a CAGR of 10%, and overall rise in labour productivity.
The analysis shows that India is also emerging as a top exporting nation due to the country's integration into the global toy value chain, along with zero-duty market access for domestically manufactured toys in countries including UAE and Australia. The report stated that in order to position India as a viable alternative to current toy hubs of the world, i.e., China and Vietnam, consistent collaborative efforts of the toy industry and the government are essential for advancements in technology, embracing e-commerce, encouraging partnerships and exports, investing in brand-building, engaging with educators and parents to communicate with children, valuing cultural diversity and collaborating with regional artisans, etc.
The report emphasised that to address these issues and foster growth in the Indian toy industry, a strategic plan of action was needed. The government has implemented several interventions and initiatives, including:
a) Formulation of a comprehensive National Action Plan for Toys (NAPT) having 21 specific action points, and implemented by 14 Central Ministries/Departments, with DPIIT as the coordinating body.
b) Basic Customs Duty (BCD) on toys (HS code 9503) was increased from 20% to 60% in February 2020, and subsequently to 70% in March 2023.
c) Directorate General of Foreign Trade (DGFT) has mandated sample testing of each import consignment to curb the import of sub-standards toys
d) A Quality Control Order (QCO) for Toys was issued in 2020, with effect from 01.01.2021.
e). Special provisions were notified by BIS on 17.12.2020 to grant licences to micro sale units manufacturing toys without testing facility for one year and without establishing in-house testing facility, which was further extended by three years.
f) BIS has granted more than 1200 licences to domestic manufacturers and more than 30 licences to foreign manufacturers for manufacture of toys with BIS standard Marks
g) Cluster-based approach adopted to support domestic Toy industry. The Ministry of MSME is supporting 19 Toy clusters under the Scheme of Funds for the Regeneration of Traditional Industries (SFURTI), and the Ministry of Textiles is providing designing and tooling support to 13 Toy clusters.
h) Several promotional initiatives have also been undertaken to promote indigenous toys and encourage innovation, including The Indian Toy Fair 2021, Toycathon, etc.
In line with the recommendations made in the report, the government has already initiated/ undertaken measures under the NAPT.
Prime minister Narendra Modi, in the August 2020 episode of “Mann ki Baat”, had expressed his desire to establish India as a global toy manufacturing hub. Accordingly, the government has undertaken a series of initiatives including formulation of a comprehensive like the National Action Plan for Toys (NAPT) to promote designing of toys, using toys as a learning resource, monitoring quality of toys, promoting indigenous toy clusters, etc.
The policy initiatives together with the endeavours of the domestic manufacturers have resulted in remarkable growth of the Indian toy industry.
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