A recent study conducted by the Indian Institute of Management (IIM) Lucknow has revealed a significant boost for the Indian toy industry. According to the study commissioned by the Department for Promotion of Industry and Internal Trade (DPIIT), the industry witnessed a remarkable 239 per cent increase in toy exports in the fiscal year 2022-23. The study also indicated a notable decline of 52 per cent in toy imports compared to the fiscal year 2014-15.
The report credits the Indian government’s concerted efforts over the past six years for creating a more favorable manufacturing ecosystem for the toy industry. During this period, the number of manufacturing units doubled, reducing the industry’s dependence on imported inputs from 33 per cent to 12 per cent. Additionally, there has been a Compound Annual Growth Rate (CAGR) of 10 per cent in gross sales value, accompanied by increased labor productivity.
The findings showcase India’s emergence as a prominent player in the global toy value chain, with the country’s integration into the global toy value chain and zero-duty market access for domestically manufactured toys in nations like the UAE and Australia. The report positions India as a viable alternative to established toy hubs like China and Vietnam.
To solidify its position in the global market, the report emphasizes the need for consistent collaborative efforts between the toy industry and the government. Key areas identified include technological advancements, e-commerce integration, partnerships and exports, brand-building investments, engagement with educators and parents for effective communication with children, valuing cultural diversity, and collaboration with regional artisans.
The Indian government has implemented various interventions and initiatives to foster growth in the toy industry. These include the formulation of a comprehensive National Action Plan for Toys (NAPT) with 21 specific action points, increases in Basic Customs Duty (BCD) on toys, sample testing of each import consignment by the Directorate General of Foreign Trade (DGFT) to curb sub-standard imports, issuance of a Quality Control Order (QCO) for toys in 2020, and support through cluster-based approaches.
The report also indicates significant interest from global retail giant Walmart to import toys from India and sell them worldwide. Walmart has set a target of USD 10 billion for overall imports from India, which includes Indian toys.
With the concerted efforts of the government and domestic manufacturers, the Indian toy industry is projected to witness substantial growth in the next five years. The DPIIT Secretary envisions a doubling of the Indian toy industry, with the global toy industry standing at around USD 300 billion and India’s share currently at USD 1.5 billion.
The report highlights the substantial reduction in India’s dependency on Chinese imports, from 94 per cent to 62 per cent. The Bureau of Indian Standards (BIS) has also issued over 1,200 safety licenses to domestic toy manufacturers, emphasizing the industry’s adherence to safety and quality standards.
The success of the Indian toy industry, reflected in declining imports, soaring exports, and quality improvement, underscores the positive impact of collaborative efforts and strategic government interventions. As the industry sets its sights on global markets, the case study emphasizes the importance of continued collaboration for sustained growth and innovation in the Indian toy sector.
