India’s Toy Story is Still in the Making- The Hindu Editorial Analysis

In July 2022, India’s exports of toys surged from ₹300-400 crore to ₹2,600 cr. Imports of toys, which used to be over ₹3,000 crore, has fallen by 70%, signifying a drop in India’s reliance on Imports.

Table of Contents

India’s Toy Industry UPSC Relevance

Toy Sector in India is still in nascent stage and faces tough competition from other global imports, especially from Chinese toy Industry who dump their cheap products in Indian markets, hampering the growth and development of Indian Toy Industry.

Understanding of Indian Toy Industry is also Important for UPSC Prelims 2023 Exam and UPSC Mains Exam (GS Paper 3- Indian Economy and Growth and development of Various Sectors including the Toy industry).

India’s Toy Industry in 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 rued the fact that about 80% of the toys were imported, with crores of rupees going abroad, calling on people to be “vocal for local toys”.

Toy Industry Boom in India

Status of India’s Toy industry

In July 2022, India’s exports of toys surged from ₹300-400 crore to ₹2,600 crore, a boost that “no one could have imagined.”
Beyond an increase in exports, the imports of toys, which used to be over ₹3,000 crore, has fallen by 70%, signifying a drop in India’s reliance on foreign-made toys — especially from China.
One of the major reasons behind the decline was the increase of Basic Customs Duty on import of toys from 20% to 60%.
- Also, stringent conditions were imposed on the quality of imported toys.

India’s Toy 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.

India’s Toy Imports

China was and is India’s major source of toys, though the imports have halved from $300 million to $150 million in recent years.
Japan, Taiwan, Hong Kong, Netherlands and the U.S. were other sources but they pale in comparison to China’s share.
While it is true that India’s dependency on Chinese toys reduced and the former’s exports improved in the recent months, the scale of exports is still miniscule and close to 200 times smaller than that of China’s.
The move to curb toy imports from China by India will have negligible impact on the former’s export volume.
India formed only 0.7% of China’s toy exports in 2021 and was China’s 26th biggest destination for toys.

Global Toy Industry

Modi’s repeated clarion calls during the course of the pandemic came at a time when toy sales were surging globally, given the COVID-19 lockdowns and restrictions.
Global toy exports jumped from $119 billion in 2020 to $158 billion in 2021, an unprecedented 32% increase.
The U.S. was again a major reason behind this rise. From $36 billion in 2020 to $52 billion in 2021, toy imports into the U.S. saw a 44% increase.
While toy imports into Germany, the U.K., France, Japan and Canada too increased, the volume paled in comparison to the United States’ imports.
Most of the United States’ increased demand in 2021 was fulfilled by China, which maintained its position as the world’s biggest exporter.
China’s toy exports increased from $71 billion in 2020 to $101 billion in 2021, far beyond Germany — the world’s second largest exporter, exporting $11 billion in 2021.
- the U.S. was the biggest destination for China’s toys, forming 36% of the exports.
At present, the world toy market is mostly the U.S. buying and China selling, with other players forming a small share of both imports and exports.

Conclusion

While India’s latest surge in toy exports was majorly due to the United States, 77% of the latter’s toy needs were met by China in 2021. India only fulfilled 0.5% of the U.S.’s toy needs and was its 9th biggest source for toys.
This suggests that India has huge potential for it Toy Industry both in terms of fulfilling India’s Domestic Demands and Increasing its share in the Global Toy Industry.

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