The Current Outlook of the Toy Industry in India
At present India is manufacturing a variety of toys that are capable to stand out in the global and the local market. The toy industry has observed a boom over the last few decades and now the toys have become more accessible as their prices have been reduced significantly. Many factors contributed to the growth of the toy industry in India like easily available raw materials, advanced manufacturing technology, e-commerce, and a lower tax rate. However, still India has to go long way to become a major global supplier in the toy industry.
Factors Contributing to the Growth Toy Industry in India:
- Government Initiatives: Government initiatives have helped a lot in the toy-making industry. The GIOI launched the Toycathon and Virtual India Toy fair 201, which provided a chance for the toy manufacturers of India to exhibit their toys and showcase the potential of the Indian toy manufacturing industry. Also, the GOI has kept the GST rate on toys between 12-18% so that they can become easily accessible to people.
- Technological Reform: The technological reform proved to be quite game-changing for the Indian toy industry, as it made the manufacturing process quite easy and less time-consuming with increased precision. Also, it helped the Indian toy industry to compete with other major global suppliers in the toy industry.
- Population: Arguably, the population can also be considered as one of the major factors contributing to the growth of the toy industry in India. As India is the second largest populated country in the world, and thus the demand increases with the increase in the population, it helped the Indian toy industry to grow.
- Quality Improvement: A couple of years back, most of the toys available were made out of low-grade plastic and were breakable. But today with the help of new engineering plastics, toys have become more durable. Also, the government introduced a new set of regulations under BIS (Bureau of Indian Standards) to meet the standard quality of toys.
Govt.’s Initiatives to Promote the Growth of the Toy Industry:
- Location 2021: The GOI launched a joint initiative for the toy makers of India with the Ministry of education, All India Council of Technical Education (AICTE), Ministry of women and child Development (MCWD), Ministry of Commerce and Industry, Ministry of textile, and Ministry of MSME (Micro, Small and Medium Enterprise). The Toycathon 2021, was organized to engage all the toy makers around the nation and exhibit the capabilities of the Indian toy industry in front of the whole world. This initiative aimed to develop more intelligent toys in India with the help of AI.
- Toy Cluster Program: The majority of the toy industry in India falls under the MSME sector and is mainly located on the outskirts of Delhi, Maharashtra and Tamilnadu with some small manufacturers in central India. Thus currently the toy industry in India is quite scattered, so with the help of the toy cluster program, the GOI is planning to streamline the toy sector by taking it to a specific zone for example SEZ (Special Economic Zones). This also benefits the manufacturers to easily export it overseas.
- Atma-Nirbhar Bharat: Under the Atma-Nirbhar Bharat and Make in India scheme of the GOI, the government is planning to build an ecosystem that allows the toy maker of India to completely manufacture toys in India without importing anything. Also through this scheme, GOI is encouraging the netizens to opt for local toys.
Barriers to the Growth of the Toy Industry in India:
- At present, the GST rates on toys are 18% which is not a lot, but still, there is a space for tax reduction, which will further decrease the price of toys and will boost sales.
- The unavailability of major raw materials acts as a main barrier to the toy industry in India. India does not produce enough raw materials required for the toy industry. Thus companies import it from other nations which increases the prices of toys in India.
- The lack of technology also seems to act as a barrier to the Indian toy industry. Even after huge advancements in technology, India hasn’t got enough to compete with the other players in the toy industry like China, Japan, and the USA.
- Indian toys are not quite accessible as a majority of them are not available on e-commerce websites. As today major trade takes place online on e-commerce websites and thus the absence of Indian toys over there results in lower sales.
Indian Toy Industry’s Contribution to the Indian Economy:
The toy industry of India contributes significantly to the Indian economy as the majority of toy industries come under the MSME sector, which is one of the major industrial sectors of the nation. Also, India has a 0.5% of the total share of the global toy market, that worth more than 1.5 billion USD. With the ease of foreign trade policies and the reduction of export charges, Indian toys are now readily exported to different parts of the world.
Also, a large population of the country is employed in the toy manufacturing sector. The toy industry o India does not heavily contribute to India’s GDP but with the help of government policies, the imports of toys have been reduced significantly thus helping the Indian economy to grow at a rapid pace.