Indian toy manufacturers scale up amid rise in demand; eyes global markets

The import of toys into India has declined sharply from USD 304 million in 2018-19 to USD 36 million in 2021-22, said a data from the Ministry of Commerce & Industry.

The Indian toy industry is growing as the government has mandated the domestic players to have BIS certification for import

Government policies such as increasing customs duties on imported toys and mandating BIS certification requirement for imports not only boosted domestic manufacturing but also helped the industry to explore global markets and enhance exports.

The demand for toys based on Indian mythological characters, desi movie characters and superheroes such as Chota Bheem are on the rise as the domestic players break away from the dominance of China and some other countries, according to industry experts.

Now the ‘made-in-India’ toys have a very clear edge in the domestic markets and the manufacturers are scaling up their production capacity to meet the growing local as well as international demand. The import of toys into India has declined sharply from USD 304 million in 2018-19 to USD 36 million in 2021-22, said a data from the Ministry of Commerce & Industry.

On the other hand, exports have increased from USD 109 million in 2018-19 to USD 177 million in 2021-22, it added.
According to the industry, the sector is also going global, as manufacturers are scouting new markets and increasing exports to the Middle East and African countries.

The Indian toy industry is growing as the government has mandated the domestic players to have BIS (Bureau of Indian Standards) certification for import and also increased customs duty, said Toy Association Of India president Ajay Agarwal. “These are the two reasons as import of toys has declined,” Agarwal told PTI.

Encouraged by these supporting initiatives, the Indian manufacturers are now scaling up their production and investing to augment their capacity, he added.

“Now several makers are manufacturing toys based on Indian ethos and culture. Icons like Chota Bheem are very popular and several manufacturers have the licence to manufacture them,” he said, adding that more manufacturers are entering this category of toys.

According to a joint report by industry body FICCI and KPMG, the Indian toy market was estimated to be around USD 1 billion in 2019-20 and is expected to double to USD 2 billion by 2024-25.

“Three years back 80 per cent of the toys were imported and the rest 20 per cent was from the domestic manufacturers but now the situation has changed,” said Aggarwal, adding, “Imports have been reduced by 60 to 70 per cent and many players are only importing components and assembling the toy in India.” Rajeev Batra, promotor of Panda International, said that the government’s move to prohibit the sale of non-certified toys in the country played a “game changer” role in boosting domestic manufacturing and reducing imports from China.

“Two-three years back, about 80 per cent of the toys sold in the domestic markets were imported. Most of them were Chinese toys but after the introduction of BIS regulations, the scenario has changed. Now importing is not easy. We have started manufacturing here and exports also,” Batra said. He said that the government’s handholding is helping the industry to set up manufacturing units.

The industry has suggested the government to introduce a production linked incentive scheme for the sector and a separate export promotion council for them. Manu Gupta, promotor of Playgro Toys India, also said that some more government support would help the industry to reach the next level and generate jobs and boost exports.

“The global toy industry is about USD 120 billion and India’s share is low. A national toy policy and production linked incentive scheme would help in promoting the growth of the sector,” Gupta said.

According to Agarwal, the retail sales value was around Rs 20,000 crore pre-pandemic and is expected to grow further this year led by increasing demand.

From January 2021, the government has mandated all toy manufacturers and importers to have BIS (Bureau of Indian Standards) quality certification. Over 800 manufacturers in the toy industry primarily from the Micro, Small and Medium Enterprises (MSME) sector now have BIS certification.

Additional secretary in the Department for Promotion of Industry and Internal Trade (DPIIT) Anil Agarwal had said the government’s initiatives like increasing import duty and issuance of quality control order has helped in cutting imports and promoting manufacturing, and now the industry has to “think on big ideas”.

Basic Customs Duty (BCD) on toys was increased from 20 per cent to 60 per cent in February 2020 to promote local manufacturing.

Two years before, in the second half of 2020 Prime Minister Narendra Modi had called upon startups and entrepreneurs to “team up for toys”, as he noted India’s minuscule share in the global toy market of over Rs 7 lakh crore and asserted that the country has talent and ability to become a hub for the industry.

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