List of Contents
Source– The post is based on the article “Why Beijing’s rising maritime clout calls for a joint India-Japan nuclear submarine project” published in the Business Standard on 23rd December 2022.
Syllabus: GS3- Indian economy
Relevance– Issues related to manufacturing sector
News– The article explains the status of the toy industry in India. It also explains the issues faced by this sector.
What are the changes in the toy sector in recent years?
In the last four years, India’s imports of toys, games and sports requisites and their parts and accessories declined 39%.
In the same period, Chinese imports dipped 45% in 2021-22.
In the case of only toys, exports increased by 61.38% in 2021-22. Imports of toys alone have dropped 70%.
What is the game-changer for the industry in terms of competing with Chinese imports?
One of the major reasons for this import-export shift is a sharp increase in basic customs duty from 20 to 60% in February 2020.
This was followed by the decision to bring toys under compulsory Bureau of Indian Standards certification starting January 1, 2021. This quality control became applicable to both domestic and overseas manufacturers.
What is the current status of the toy industry in India?
According to the Toy Association of India, the size of the industry was around Rs 20,000 crore in retail value in 2020. Out of this, only around Rs 5,000 crore came from local manufacturing.
Based on a report by IMARC, a market research company, the Indian toys market size reached $1.5 billion in 2022. It may touch $3 billion by 2028, a compounded annual growth rate of 12.2%.
At present, India is exporting to around 30 countries.
Local manufacturing and the involvement of more micro entrepreneurs and start-ups is on the rise. More than 100 new registered manufacturers entered the sector in the last two years. Local production has gone up 20-30%.
What are issues faced by the toy industry?
There are issues related to quality. A study by the Quality Council of India in 2019 showed that out of 121 different varieties of toys procured only 33% passed quality tests.
Mass manufacturers are not prepared to come under the BIS umbrella owing to the level of paperwork and heavy compliances burden it imposes. Majority of manufactures fall under the MSME segment.
Chinese toys are still available in the Indian market and only around 1,000 local manufacturers have registered under BIS.
In India, the number of electronic manufacturers is relatively low. We are specially importing chips and ICs from countries like China, Taiwan and Hong Kong.
India still lacks a R&D centre or a design institute to drive the changes in the sector.