INDIA'S
TOY INDUSTRIES - ECONOMY
News: India’s Toy Story is Still in the Making
What's
in the news?
●
Amid the COVID-19 pandemic in August
2020), Prime Minister Narendra Modi exhorted that India can become a global toy hub.
●
In July 2021, he ruled the fact that about
80% of the toys were imported, with crores of rupees going abroad, calling on
people to be "vocal for
local".
Key
takeaways:
●
Beyond an increase in exports, Mr. Modi
also said that imports of toys, which used to be over 23,000crore, have fallen
by 70%, signifying a drop in India's
reliance on foreign-made toys especially from China.
Introduction
to Indian toys:
●
The invention of toys in India took place
during the Indus Valley Civilization, approximately 8,000 years ago.
●
The original toys comprised whistle-shaped
parrots, toy monkeys with long hands to slide down a rope or stick and
miniature farm carts.
●
All these toys were made from natural
materials such as bamboo sticks, hay, and natural clay like soil, rocks, and
fibre cloth.
●
However, today, the advent of progressive
technology and mechanisms has stimulated companies to produce fresh and
inventive toys.
● Soon, owing to the new revolution of ‘Local se Vocal’, India is anticipated to become the global hub by 2025-2030.
Increase
in imports and decrease in exports:
1.
Increase in Import Duty:
● One of the major reasons behind the decline of imports was the increase of Basic Customs Duty on import of toys from 20% to 60%.
2.
Increase in Exports:
●
The total exports have marginally
increased to $363 million in the
April to October 2022 period, from $178 million in the same period in 2015.
●
The U.S.
was the major reason behind this rise as India's exports to the country
increased from $44 million to $144 million.
●
The U.K., Germany, Netherlands and Canada
were other major destinations.
Current
Status of Toy industry in India:
1.
Increasing economic Value: The Indian toys market reached a
value of US$ 1.23 Billion in 2020.
2.
Consistent growth: Indian toys market is expected to grow at
a CAGR of 12.2% during 2021-2026.
3.
Large MSME presence: Indian toy sector comprises 8,366
registered manufacturing MSMEs.
4.
Predominance of imports: India has been importing toys
largely from China (about 3/4th of total imports). However, a gradual decline
in imports has been recorded in the past three years.
5.
Small global share: While the global toy industry is over ₹7
trillion, India's share is very small.
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Economic Opportunities |
Social Opportunities |
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1. Huge consumer base: ●
The country has a very large young population with
around half of the total population under the age of 25, creating a large
platter of potential consumers. ●
Some reports suggest that India’s toy market has the potential to double to $2 billion by 2025.
2. Growing demand with rise of the middle class: ●
Growing demand and decreasing cost of production has
resulted in a major shift from traditional, medium- to low-end
battery-operated toys, towards innovative electronic toys, intelligent toys.
3. High employment generating sector: ●
Large MSME
presence
in the sector has the potential to generate large employment through
artisans, small traders and MSME manufacturers. ●
As a corollary to MSME growth, growth in the Toy
Manufacturing sector in tier-II and tier-III markets has also been witnessed.
4. Emergence of digital marketplace: ●
Growth of E-commerce has helped overcome the logistical difficulties and has expanded the reach
of local and traditional toy markets. ●
Growth of E-commerce has indirectly increased the
export potential of local manufacturers who can now compete in the global
markets.
5. Strategic: ●
Strategically India can reduce the penetration of China’s toys in the Indian market which
will enhance our health (because Chinese toys are made up of chemicals)
and reduce the import bill.
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1. Growing educational toys market: ●
Toys have an impact on the overall development of a child. E.g.: motor, psychomotor, cognitive
skills and also stimulate creativity.
2. Shaping the value system: ●
Toys bring to life society’s traditions, beliefs,
values, and ethos and thus can act as an agent of propagation of the ethics and progressive value systems. E.g.,
using dolls for breaking gender stereotypes.
3. Increasing cultural awareness: ●
Toys can be used to increase curiosity in histories,
mythology etc. by recreating cultural characters. E.g., gradual movement of
children from ‘Mickey Mouse’ playing cards to ‘Chota Bheem’ playing cards
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STEPS
TAKEN BY GOVERNMENT EXPLOIT THIS POTENTIAL:
1.
Indigenous toy clusters:
●
Several Toy clusters have been approved
under the Scheme of Fund for Regeneration of Traditional Industries (SFURTI) scheme such as Lucknow Soft
toys cluster and Wood craft cluster of Jodhpur.
2.
National Toy Action Plan:
●
The Government of India, by involving 15
ministries has prepared a National Toy Action Plan to make the Indian toy
industry competitive. It is a big Make in India push for domestic manufacturing
of toys.
●
The formation of the National Toy Action
Plan, Vocal for Local and Make in India
are likely to benefit domestic toy manufacturers.
3.
Product Specific Industrial Cluster Development Programme:
●
It aims to build toy clusters in dedicated
SEZs to help them become self-sustained ecosystems catering to export markets.
●
First-of-its-kind Virtual India Toy Fair 2021 was organized.
●
“Toys” identified as one of the key
sectors under Aatmanirbhar Bharat Abhiyan.
●
Toycathon-2021
was launched to challenge India’s innovative minds to conceptualize novel toys
and games based on Indian civilization, history, culture, mythology, and ethos.
Challenges:
1.
Limitations manufacturing facilities:
●
Poor infrastructure and absence of end-to-end manufacturing
facilities hinders the sector’s growth.
2.
Economies of scale issue:
●
Toy manufacturing economies significantly
depend on large production for profitability and thus requires high investment and continuous demand, which is
unavailable in emerging markets like India.
3.
Absence of skilled labour:
●
Toy manufacturing requires specific skill
sets which are unavailable in India’s predominantly unskilled labour.
4.
Fragmented market:
●
India’s toy market is largely fragmented
with limited linkages between local
artisans, manufacturers and marketing agents such as local traders.
5.
Technological challenges:
●
With the evolution of the gaming industry,
demand for manufacturing of digitally high end toys is growing. But this
requires technological skill sets which are either unavailable or unaffordable
to the local industry.
WAY
FORWARD
1.
Enhancing manufacturing competitiveness by addressing the raw
material issues, streamlining the GST input credit structure and overcoming the
supply chain issues.
2.
Skilling and R&D to bridge the persistent gap in demand and supply:
Development of toy design centres with focus on R&D to encourage
innovation, incentivizing technical institutes to offer specialized courses in
toy and game design and incentivizing knowledge mobility across institutions.
3.
Improving Ease of doing business through a one-stop shop
like “National Creative Hub (C-Hub)”, improving
digital preparedness and leveraging the growing start-up ecosystem.
4.
Tech collaboration need of the hour: Strategic relationships
with global players to leverage Science, Technology, Engineering, Art and Math
toys.
5.
Building a “Playful, Creative and Innovative Economy”:
Leveraging National Education Policy 2020 to push local artisans and promoting
initiatives like toy-based tourism, Local “Toy Banks” and “Toy Library” models.
6.
Testing and certification: Developing a standard norm and
increasing the number of labs in testing and certification and expanding
geographic coverage of these labs.