Can Indian Toy Industry Meet Domestic Demand And Supply?

New Delhi: Prime Minister Narendra Modi in his Mann Ki Baat on August 30 emphasised on the need to increase local production of toys and increase India’s share in the global toy market. Earlier, he had asked India’s youth to innovate the toy industry with the aid of modern technology.

India’s toy industry is worth Rs 5000 to 6000 crore, making up less than 1 percent of the world market. Meanwhile, it only occupies just about 25 percent of India’s market. The rest is dominated by Chinese toys, according to The Times Of India.

If Chinese toys are taken away from the market, the local toy providers will fail to meet the demand and expectations of the market.

Due to the tense Indo-China relationship, increased import tariffs, and pandemic infused lockdown, the supply of Chinese toys to India has declined. However, there has been an increase in demand for toys with kids mostly locked up at homes and without schools.

“But at the same time, demand for toys has increased in the past three to four months because children are locked up at home and are demanding more toys,” TOI quoted Ajay Agarwal, a Delhi toy manufacturer and President of Toy Association of India as saying.

Adding further he said, ” All these factors have led to about 25 percent surge in domestic demand for toys, which we are trying to meet by scaling up production… but it will take us some time to do that.”

Even though organised manufacturers like Agarwal are scaling up by automating or hiring more labour, a large number of toymakers in India belong to the unorganised sector. They do not have sufficient capital to suddenly increase production. Sixty per cent of India’s 3,512 manufactures operate in the unorganised sector from small units with sometimes a few as five employees.

Indian toy factories closed 30 years ago due to increased competition from China-made-toys especially the electric ones due to liberalisation.

“We lack the equipment to make electric toys. For this, we need to import machines from South Korea and Japan and right now, they are expensive to get with 34% import duty. If the government reduces the duty we can start making electric toys as well. There is a great scope of growth in this industry,” said Agarwal.

On the contrary, Indian manufacturers specialise in board games, soft and plastic toys, pull-along toys, play dough, and puzzles.