Toys made in India can be promoted in the world. And could beat the Chinese toy industry. For this, the government's new step is to include the toy industry in the Production-Linked Incentive (PLI) scheme.
After the smartphone sector, India is now moving forward in the toy industry through the campaign of 'Self-reliant India'. Which produces toys for itself as well as for the world. The government is making many efforts to save the toy industry. So that toys made in India can be promoted all over the world. And could beat the Chinese toy business. For this, the government's new step is to include the toy industry in the Production-Linked Incentive (PLI) scheme, as this business has been demanding for a long time. The Modi government is waging a slow war against China in one such sector. Where the image of China's toy industry is the fastest and most visible.
The Modi government quickly realized that producing labour-intensive toys in India, producing cheap plastic and cloth toys, is not as difficult as electronics which require inputs, raw materials, technology and skilled labour. That's why the Modi government is motivating the toy manufacturers of India to become self-sufficient. He has promoted the toy business several times in his Mann Ki Baat radio broadcast.
India has also started gaining ground in the toy business. Chinese imports are continuously decreasing and local manufacturing is increasing. Just five years ago Delhi's Sadar Bazar was a big toy centre, a real Chinese market, as most of the toys were imported from China. Only 20% of the toys sold were made in the country. China had 75% stake in the rest. Now the toys of Chinese label are slowly disappearing from Sadar Bazar. Till a few years ago, India was an importer of toys. Which has now changed. Imports of toys have fallen by 70% in the last three years, from $371 million in FY19 to $110 million in FY22.
India's exports are increasing
According to the commerce ministry, there has been an increase of 61.38% in India's exports from $ 202 million to $ 326 million in the financial year 2019. India's toy industry remains competitive as compared to China or western countries. The miracle of toy exports has been possible to a large extent due to the strong measures taken by the government. India's toy business is still not able to stand in front of China on its own. Along with this, India's exports increased when China's big business was slowing down during the epidemic. But as China's economy emerges from the post-pandemic slump, its production engine will come back to life in a year or two.
India could not progress because
China started out as the factory of the world by making small plastic goods and electronics structures. As it gained near-dominance in these areas, whatever India had in the name of the toy business was almost wiped out. With time Chinese manufacturing has become so advanced that most importers in the country are importing Chinese toys.
Explain that India uses the most electronics, cloth and plastic, India had a good opportunity to promote the toy industry. But before it could move beyond wooden and plastic toys, by then China had started flooding the Indian market with toys. This ensured that the Indian toy business could not modernize enough to beat Chinese imports.
India's share was $ 1.5 billion
Labor laws, taxation issues, lack of technology and poor government incentives meant that none of the major Indian industrial houses ventured into this sector. The small size of India's factories, compared to China's end-to-end, integrated manufacturing facilities, ensured that there were no economies of scale. At Toyathon 2021, an initiative to crowd-source innovative toys and games ideas, PM Modi said India's share of the $100 billion global toy market was just $1.5 billion, while China's is estimated to be 55-70% .
Toy business can reach $ 3 billion
The opportunity has come for India when the world is looking for alternatives to Chinese products, and India has a huge domestic market and enough demand to support large-scale manufacturing of toys. With nearly 25 percent of the Indian population falling in the 0-14 age category, a huge customer segment, the Indian toy market is expected to be worth 1.5 billion in 2022. According to a 2022 report by IMARC Group, India's toy industry is expected to reach $3 billion by 2028 if it grows at a compound annual growth rate of 12.5-13% over the next five years.
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