India is a nation with a huge potential for the toy industry as there are over 1.4 billion people in India, of whom 27% are under the age of 14.
Until 2019, 80% of toys in India were imported and 20% were produced domestically making India heavily dependent on imports for its toy needs.
Recently, this scenario has drastically changed as the government took several initiatives to boost the domestic toy industry.
As a result, the Indian toy industry is now breaking away from the dominance of global leaders like China – the largest producer and exporter in the world.
So, in this blog, we are going to cover everything you need to know about the Indian toy industry from government initiatives that transformed the face of the toy industry to future predictions and more.
Let’s dive in…
Current Scenario of the Indian Toy Industry
India’s toy industry has achieved remarkable growth during FY 2022-23 in comparison to FY 2014-15.
- Drop in Imports: Around 52% of the imports dropped down in 2022-23
- Increase in Exports: The rate of exports increased by 239% in the same time frame.
- Improved Quality: The domestic quality of toys has improved since FY 2014-15.
This observation was noted by the Indian Institute of Management (IIM) Lucknow on behalf of the Department for Promotion of Industry and Internal Trade (DPIIT) in a case study entitled “The Success Story of Made in India”.
But, what government action encouraged the toy industry and changed the entire game between FY 2014-15 and 2022-2023?
Government Initiatives that Boosted the Toy Industry
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 this dream, the government introduced the National Action Plan for Toys (NAPT) to support the Indian toy industry.
There are 21 action points in the NAPT, covering topics such as design, quality control, marketing, and skill development.
Furthermore, several central ministries and departments implement the plan with the assistance of the Department for Promotion of Industry and Internal Trade (DPIIT).
Some of the initiatives under NAPT include:
Initiative to Improve Quality of Toy Products
In 2020, the Government of India issued a Quality Control Order for toys to improve the quality of toys manufactured and sold in India.
According to the order, from September 1, 2020, toys must be certified by the Bureau of Indian Standards (BIS) to comply with the latest toy safety standards.
The order also underlines the importance of quality standards for imported and manufactured toys.
Mandatory Sample Testing for Toys
The Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce and Industry, mandated sample testing for each import consignment to prevent the import of substandard toys, ensuring better quality control.
Reformed Tax Policy
Basic Customs Duty (BCD) on toys was increased from 20% to 60% in February 2020, and then to 70% in March 2023.
Licence to Micro Units
The BIS notified a special provision in December 2020 for micro units manufacturing toys without an in-house testing facility for one year, which was later extended by a further three years.
Cluster-based Approach for Toy Industry
This approach was adopted to support the domestic toy industry.
As part of the Scheme of Funds for the Regeneration of Traditional Industries (SFURTI), the MSME Ministry supports 19 Toy clusters.
Moreover, the Ministry of Textiles is helping 13 toy clusters with designing and tooling.
Promotional Initiatives for the Toy Industry
To promote domestic toy manufacturers, encourage innovation, and showcase the toy industry, several promotional initiatives have been taken, such as the Indian Toy Fair 2021, Toycathon, and so on.
Technology and Innovation in the Toy Industry
India has broadened its toy manufacturing scope beyond just soft/playing and traditional toys.
The production now includes educational, skill-building, interactive, and digital toys, contributing to the development of a child’s mental, physical, and cognitive skills.
Export Boost
Zero duty market access for locally produced toys in UAE, and Australia coupled with the production of high-quality toys.
E-commerce Surge
The widespread availability of toys online simplifies the purchasing process for consumers, addressing distribution issues.
Source: PIB
Future Prediction of the Toy Industry
The Indian toy market is brimming with potential, attracting retailers, business owners, and entrepreneurs alike.
This rapidly expanding market offers a diverse range of opportunities driven by increasing urbanization, a growing young population, and rising disposable incomes.
Valued at USD 1.72 billion in 2024, the Indian toy market is projected to reach a staggering USD 3 billion by 2028, indicating a Compound Annual Growth Rate (CAGR) of 4.97%.
Additionally, India is also expecting an increase in toy exports by 300% in the next four years.
Another thriving sector within India’s manufacturing industry is the mobile phone sector, which is meeting domestic demand and expanding globally.
Other sectors such as pharmaceuticals/healthcare, electronics and consumer appliances, and renewable energy are also showing promising developments.
However, there is still room for growth to elevate the manufacturing sector to a level comparable to agriculture and services.
There are some suggestions to make manufacturing a more significant contributor to growth.
Suggestions to Boost the Manufacturing Sector
- Infrastructure and Incentives: Address the lack of Infrastructure and better incentives, especially for small industries.
- Regulatory Support: Ensure regulatory authorities facilitate and support manufacturers.
- Manufacturing Policies: Need to work on manufacturing policies like the India Industrial Land Bank for Land Availability and many others to promote ease of doing business and facilitate global expansion.
- Startup Encouragement: Encourage startups within the manufacturing sector.
- Surveillance Mechanisms: Implement stringent surveillance mechanisms to identify and rectify the production or import of sub-standard products within the country.
- Skill Development: Invest in skill development programs for Indian manufacturers to enhance their capabilities.
- Consumer Awareness: Raise consumer awareness about the importance of purchasing products made in India, promoting domestic industries.
Get ISI Certification for Toys
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