Govt. efforts for the toy industry lead to doubling of manufacturing units, reduction in imported inputs from 33% to 12% and increase in gross sales value by a CAGR of 10%

The Indian Toy industry witnessed remarkable growth in FY 2022-23 in comparison to FY 2014-15, with the decline in imports by 52%, rise in exports by 239% and development 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” has been 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 efforts of the Government have enabled in creation of a more conducive manufacturing ecosystem for the Indian Toy industry. It highlighted that in a span of 6 years, from 2014 to 2020, these dedicated efforts have 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 report analyzed 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 emphasized 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 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 Shri Narendra Modi during his “Mann ki Baat” address in August 2020, expressed his desire to establish India as a global Toy manufacturing hub. To fulfil the vision, 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 of the Government together with the endeavours of the domestic manufacturers have resulted in remarkable growth of the Indian toy industry.

Customs duty increase and quality regulation strengthened to promote domestic toy manufacturing and boost exports. The Government strengthened trade and product quality measures to expand domestic toy manufacturing and exports by implementing a coordinated National Action Plan for Toys (NAPT), raising Basic Customs Duty on toys, mandating consignment sample testing, issuing a Quality Control Order, permitting BIS licences for micro manufacturers without immediate in house testing, and supporting clusters, design tooling, and promotional initiatives to integrate domestic industry into global value chains.