Indian Toy Industry Push Into The UAE Market

Context

Recently the Toy Association of India (TAI) has brought a delegation to the UAE, consisting of members including manufacturers, importers, exporters, retailers, and toy testing lab designers.

 Key Highlights

• According to the Ministry of State for Commerce and Industry, India’s exports of toys have surged by 60%, climbing from $203.46 Mn in 2018-19 to $325.72 Mn in the fiscal year 2022-23.
• The import of toys has witnessed a decline of 57%, losing from $371.69 Mn in 2018-19 to $158.70 Mn in 2022-23.
• The Indian toy industry is a number of the quickest-developing globally, projected to attain $3 Bn through 2028, growing at a CAGR of 12% between 2022-28.
• The toy producers in India are ordinarily positioned in Maharashtra, Karnataka, Tamil Nadu, and clusters throughout critical Indian states.

Potentials for toy industry

• Availability of Raw Material: India is the arena’s second biggest producer of polyester and associated fibers, accounting for 8% global share for plush toys; availability of plastics, paper forums, and textiles at competitive costs.
• Competitive Labor Costs: India stands proud as an advantageous destination due to its relatively lower exertion prices among other competing geographies.
• The import duty on toys was accelerated from 60% to 70% in Budget 2023. 
  • 100% FDI is permitted under the Automatic Route.

What are the associated challenges?

• Limited Brand Awareness: Indian toy brands have low visibility each locally and the world over. Limited advertising and marketing and brand-constructing efforts avoid their potential to compete with famous global brands.
• Fragmented Industry Structure: The enterprise is highly fragmented with a big variety of small and medium-sized establishments (SMEs), which restrict their ability to achieve economies of scale and put money into research and improvement (R&D).
• Global Competitors: Asia’s successful industrializing countries sell toy exports for job advent, starting with Japan about a century ago, China for the reason that 1980s, and presently Vietnam following in their footsteps. 
• Regulation and Adhering to Standards: Many of them have struggled to hold up with the regulatory adjustments and cling to BIS standards.
• High Cost: Small producers are not able to upgrade to machinery manufacturing as taxes levy on the system is high.

Government projects

• Vocal for Local: The Government of India offers a complete guide through the National Action Plan for Toys (NAPT) by collectively bringing 20+ Ministries/ Departments.
  • The import duty on toys was improved from 60% to 70% in Budget 2023. 
• Large Cluster Ecosystem: The Government of India has established 60+ toy clusters to encourage home and global toy manufacturers to set up operations in India.
  • There is a 400 acre cluster set up through Aequs in Koppal, Karnataka and a one hundred acre facility being advanced in Uttar Pradesh.
• Quality Control Order (QCO) on Toys: It was issued in 2020 underneath the BIS act to make certain toys synthetic or imported into the country have been in-line with global goods standards. 
• Customized State Incentives: Multiple states have introduced incentives for toy manufacturers subsiding nearly 30% of the cost of manufacturing.

Way Ahead

• India has recently concluded Free Trade Agreements with geographies which includes UAE and Middle East, supplying zero-obligation market access to possibilities for India-made toys.
• Also there is a need for Strengthen industry associations to offer a unified voice for the world and to facilitate collaboration amongst stakeholders.

Source: The Hindu

UPSC Mains Practice Question

Q. “Success of ‘Make in India’ program depends on the success of ‘Skill India’ programme and radical labour reforms.” Discuss with logical arguments. (2015)

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