Prime Minister Narendra Modi’s Independence Day speech on Monday cited India’s toy industry when he called for reducing imports and promoting an Atmanirbhar Bharat (self-governing India).
His comments come at a time when the country’s toy imports have fallen by 39%, from $645.63 million in 2018-2019 to $392.92 million in 2021-22. Exports increased by 31%, from $417.32 million in 2018-2019 to $545.97 million in 2021-2022. “Even children aged five to seven say they don’t want to play with foreign-made toys. I greet them. It shows the spirit of Atmanirbhar Bharat in them,” Modi said.
The majority of India’s toy imports were made in China before the coronavirus pandemic: the number fell by 45%, from $451.71 million in 2018-29 to $246.74 million in 2021- 22. According to data from the Indian Ministry of Commerce and Industry, Chinese products accounted for 71% of all toys imported in 2020-2021. The figure fell to 62% in 2021-2022.
Industry experts have said that toy imports have fallen due to the rise in basic customs duties, from 20% to 60% in February 20202. India last year banned the sale of toys not certified by the Bureau of Indian Standards (BIS). This meant that all toys sold in India had to be certified by the bureau after mandatory product testing, including for overseas units.
“No company outside of India has obtained BIS certification so far. This has reduced our imports. As for micro-small and medium entrepreneurs, they now have dedicated R&D centers in their manufacturing units. Moreover, the share of Indian exports in the international market has also increased,” said Ajay Aggarwal, Chairman of the Toy Association of India (TAI).
According to TAI, out of about 6,000 toy manufacturing units in the country, about 850 have obtained a BIS license. “One bright spot we see is that the majority of importers are now becoming manufacturers, setting up their own units. Several hubs and clusters are emerging across the country. We also anticipate a production-related incentive for toy manufacturing soon, as well as government support on the interest rate. At the current rate, India will be the second largest toy exporter within five years,” said Pawan Gupta, owner of RP Associates, a Delhi-based distributor, importer and exporter.
The Ministry of Micro, Small and Medium Enterprises (MSMEs) has approved 19 toy clusters across the country to develop the sector: nine in Madhya Pradesh, three in Rajasthan, two in Uttar Pradesh, two in Karnataka and one in Andhra. Pradesh, Maharashtra and Tamil Nadu.