Ease of doing business for MSMEs: According to available government data, the overall value of India’s toy imports increased from $ 371 million in FY19 to $ 343 million in fiscal year 19. fiscal year 20 and $ 143 million through December 2020, as well as dependence on China as a percentage of total imports. which fell from 90 percent in FY18 to 76 percent through December 2020.
Ease of doing business for MSMEs: India’s toy sector, which comprises 8,366 manufacturing MSMEs registered under the 2008 National Industry Classification Code, imports toys largely from China. However, a gradual decline in imports has been recorded over the past three years. According to available government data, the aggregate value of India’s toy imports increased from $ 371 million in FY19 to $ 343 million in FY20 and to $ 143 million through December 2020, as well as the dependence on China as a percentage of total imports which increased from 90% in FY18 to 76% until December 2020.
Experts cite the measures adopted by the government in recent years to promote domestic manufacturing has led to the contraction of imports. The main beneficiaries have been the small businesses here.
“The decline in imports is benefiting small local manufacturers with increased demand due to measures taken by the government. In my opinion, India could become a major toy manufacturing hub in the world over the next three or four years if the decline in imports continues. Along with the growth of the manufacturing sector, this has also contributed to employment, as the toy is a labor intensive sector. We estimate that there are around 3 million people engaged in the sector. Overall manufacturing growth could reach 25-30% ahead, ”Ajay Aggarwal, chairman of the Toy Association of India, told Financial Express Online. Aggarwal also runs the Ankit Toy Manufacturing Company which manufactures kitchen utensils and toy building blocks.
It is important to note that in 2019 the General Directorate of Foreign Trade had mandated testing of samples of each shipment of toys and prohibited the authorization of sale unless the quality tests made it possible to control the import of toys. cheap and inferior in quality. In addition, in February last year, the government also increased the basic customs duty (BCD) on toys with the HS-9503 code from 20 percent to 60 percent. Toys under code 9503 included doll cars, tricycles, scooters, pedal cars and other wheeled toys, scale models and puzzles of all kinds.
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However, arguably the most important policy measure taken by the government to restrict toy imports was the Toys (Quality Control) Order (QCO) by which toys were subjected to mandatory certification from the Bureau of Indian Standards (BIS ) as of January 1 of this year. Nonetheless, the extent to which it was able to curb imports would be visible in FY22 data once released by the government. According to QCO, each toy must meet the requirements of Indian standards and also bear the BIS mark licensed by BIS.
However, since the QCO applies not only to domestic manufacturers but also to foreign manufacturers who intend to export their toys to India, the drop in imports is directly considered in this context because it involves costs. “The decrease is also due to quality control orders and BIS for exporters to India. As imports have declined, we find that the markets are still inundated with cheap Chinese products, especially electronics, as the production of electronic toys is insignificant in India. It may take some time for Indian toys to be more visible in the markets than Chinese toys, ”a consultant for a market research company told Financial Express Online on condition of anonymity.
In August of last year, Prime Minister Narendra Modi, in his monthly Mann ki Baat address, urged India to become a global toy production hub and also insisted on toy startups for ‘they focus on innovation to drive the manufacturing and global footprint of Indian toys. According to a State of Play report by KPMG and FICCI from September 2021, India’s toy sector is estimated to be worth $ 2 billion by 2025 with a target share of 2% of global exports, as more than 300 million children are in the industry. age group from 0 to 14 years old.
In 2020, the top five toys imported were dolls and action figures valued at $ 47 billion with an import share of 60%, followed by electronic toys valued at $ 22 billion with a share of 26%. Imported board games and puzzles were worth $ 4.8 billion and accounted for 2% of imports, while imported plush toys were $ 1 billion and accounted for 1% of imports. Other imported toys were worth $ 5 billion with an 8 percent share, according to the report.
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The sector’s exports had grown from $ 33 million in 2010 to $ 238 million in 2019 before dropping to $ 224 million in 2020 amid Covid. In addition, according to Invest India, the current size of the industry was around $ 1.5 billion, or 0.5% of the global market share. Manufacturers are widely dispersed throughout the NCR, Maharashtra, Karnataka, the Tamil Nadu region and cluster in the central states of India. India’s toy industry is fragmented with 90 percent of the market unorganized. The MSME base, beyond registered units, is strong but largely unorganized.
“Indian manufacturers are definitely benefiting from lower imports. Production has already increased with the drop in imports and continues to increase with the arrival of new units. States such as Uttar Pradesh have a toy park, Rajasthan have a toy town, and Karnataka reportedly has its own toy group. So the government is certainly focusing on the sector. The production increase is estimated at around 50% for indoor toys, ”Mannu Gupta, owner of the outdoor toy manufacturing company Playgro, told Financial Express Online. Playgro is one of the biggest manufacturer of outdoor toys in India, such as slides, swings, seesaws, etc. The company had obtained a BIS license worth Rs 6 lakh.
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