All work and no play

Modest tools of everyday use have existed in human history for ages. Tools like the hammer, spear, sickle, and others were used to develop our farming practices, and drive our society to agriculture and subsistence. The fact that toys are just as old as tools might surprise a lot of people. Archaeologists have found prehistoric remains of tiny soldiers, dolls, and other objects of play. While tools helped us to live, toys helped us to enjoy and indulge in recreation. Besides, toys help children learn important lessons organically. Just as puppies learn to hunt by playing, children learn to parent or develop spatial awareness by playing with toys. Indian society was exposed to foreign cultures with the spread of globalization in the 1980s. The exposure led to a demand for new things in all walks of life. Children that loved cheap Pani puri now wanted a happy meal from McDonald’s. The toys that came with it all were colorful, new, and attractive.

Indian toy makers at the time lacked raw materials, and the design and production capability to meet the surging demand. As China became the factory of the world, the Indian demand was met with an ample supply. As time passed, “Made in China” toys became synonymous with fraudulence and deceit. The toys were cheap but didn’t last for too long due to their poor build. Global import export data tells us that in 2018-19, $371 million worth of toys were imported into India.

Need of the hour

In August 2020, Narendra Modi, India’s Prime Minister, highlighted this issue. He expressed the need to improve the situation after seeing great promise in India’s domestic capabilities. The toys before were unsafe, illegitimate, and unregulated. The PM shared his plans for the rejuvenation of the sector.

Plans were made to hold events like the Toycathon 2021, Toy Business League 2022, and India Toy Fair 2021. These would engage global expertise and encourage domestic R&D. Taxes were increased from 20 to 60%, and quality control and sampling were made compulsory to deter foreign toy manufacturers. More than 850 BSI licenses were issued for domestic Toymakers.

The entire scheme was launched under the “Made in India” initiative and aimed to develop the Indian economy. The goal was to manufacture goods within the country to increase production and stimulate growth. The conventions and events assured that the products will meet global standards and be export ready.

The fruit of labor

Despite the pandemic in effect for most of its duration, this scheme has been a massive success. To highlight some key points from import export trade data:

• Indian toy exports saw a whopping 636% growth in April-August 2022 compared to April-August 2013.
• Imports saw a reduction of 70% in 2021-2022 to $110 million compared to the year before.
• Exported toys in the fiscal year 2021-2022 reached $326 million.

The government initiatives were met with a sincere commitment by domestic toy manufacturers in the Indian Toy Market. There are 4-5 Lakh artisans making toys in cottage industries. There are about 4000 different manufacturing units in India. Of these, 75% are micro units, 22% are SMEs, and 3% are large players. Key regions for toy manufacturing are Delhi, Karnataka, Tamil Nadu, and Gujarat, among others. Global toy companies have increased their sourcing from India. Toys for overseas players are being made along with domestically branded toys. Funskool India expects to earn Rs 175 crore this year from exports alone out of their targeted turnover of Rs 275 crore.

Toy industry leaders are requesting Production-linked incentives (PLI) from the government. PLIs will help multiply and snowball the momentum of the current trajectory. At the moment one of the biggest needs of the industry is for educational toys that can enhance children’s learning process. As Chota Bheem goes toe-to-toe with Barbie, make use of Cybex’s import-export data to make better business decisions and explore this potential opportunity.