India is focused on handicrafts, a backward looking policy to make a place in the world’s high-tech toys market.

New Delhi: When Indian Prime Minister Narendra Modi in his 76th Independence Day address says, “I also salute the children who are saying No to imported toys. When a 5-year-old says ‘No videshi (nothing foreign)’, #AatmaNirbharBharat (self-reliant India) runs through his veins”, it is clear how India’s toy sector policy has been taking shape. Clearly, the Indian government is looking forward to create toys with local flavour as also made by local manufacturers, mostly artisans, and replace the burgeoning toy market which had been growing adapting the global themes.
There are three reasons for the approach adopted by the Indian government. Firstly, the lion’s share of toys imported and sold in India was manufactured in China, a country with which India has hostile relations. New Delhi felt it was a low hanging fruit to squeeze China out, impacting only relatively affluent families who were not the target group politically. Secondly, it was felt by creating road block to import of toys, the country would see increase in toy manufacturing in the country, thus creating job and market opportunities.
Thirdly, India intended to use the toy opportunity to promote its traditional crafts and offer a new lease of life to traditional crafts providing economic inducement to craftsmen.
Evidently, the toy promotion rhetoric had socio-political objective, apparently more than the economic objective of matching China as a global toy-making hub. This was clearly indicated by the Prime Minister in his Independence Day speech and captured in no uncertain terms.
A satisfied government told its Parliament recently that exports of toys from the country have increased by 61.38% in the last three years, from USD 202 million in Financial Year (FY) 2018-19 to USD 326 Mn in FY 2021-22. At the same time, the import of toys has reduced by 70% in the last three years, from USD 371 mn in FY 2018-19 to USD 110mn in FY 2021-22. In effect, the current account deficit on account of toys which was USD 169 million in 2018-19 has now turned into a surplus of USD216 million in 2021-22. This encouraged the largest circulated English daily of India the Times of India to write recently, “Move over Lego and Barbie! Gilli-danda, spinning tops, VikramBetal puzzles and other domestic-themed toys are making their way into Indian kids’ households.” India’s toy sector policy is effectively an effort to put the clock back move.
The shift was influenced by several policy interventions by the government. Chronologically the steps were as under: (a) India’s Directorate General of Foreign Trade (DGFT) issued a notification on 2 December 2019 mandating sample testing of each consignment and no permission for sale of toys unless the quality testing is successful. In case of failure, the consignment is either sent back or destroyed at the cost of the importer. This directive made unbridled toy import difficult; (b) Basic Custom Duty (BCD) on toys was increased from 20% to 60% in February, 2020. The move resulted in higher prices for toys; (c) But the most critical move was when the government issued Toys (Quality Control) Order, 2020 on 25/02/2020. Through this order, toys have been brought under compulsory Bureau of Indian Standards (BIS) certification with effect from 01/01/2021. As per the Quality Control Order (QCO), every toy shall conform to the requirements of relevant Indian Standard and bear the Standard Mark under a licence from BIS Regulations. This QCO is applicable to both domestic manufacturers as well as foreign manufacturers who intend to export their toys to India; (d) But the order had to be amended on 11.12.2020 to exempt goods and articles manufactured and sold by artisans registered with Development Commissioner (M/o Textile) and also by registered proprietor and authorized users of a product registered as Geographical Indication by the Office of Controller General of Patents, Designs and Trademarks (CGPDTM). The QCO on toys thus was directed only to imports.
In addition BIS made special provisions on 17.12.2020 so as to grant license to micro scale units manufacturing toys without testing facility for one year and not to insist on establishing in-house facility. The bureau also granted 843 licences to domestic manufacturers from then safety perspective of toys, out of these, 645 licenses were granted for non-electric toys and 198 licenses for electric toys. In addition, six licences were issued to international toy manufacturers.
All such measures helped a sharp drop in import of toys, though it did not see matching rise in exports. In fact, the global market for toys is not exactly a market for handicrafts, but are electronic, mechanical, and plastic and comprise of licensed toys, including movie spin‑offs, cartoon characters, high‑tech toys and educational toys (including ‘STEM’–Science, Technology, Engineering and Mathematics–items). In addition, the craze for mobile games and e‑sports games has impacted the conventional toy market. Sadly, India is focused only on handicrafts—a rather backward looking policy to make a place in the world’s USD 104 billion market. Currently, India is a just less than 0.5% of the global market. China, in contrast, makes 75% of all toys of the world. Indian policy at present is not even looking forward to catching up with the missed opportunities.
Official reports suggest that Indian policymakers are happy with the current restrictive policy only. An official release seemed to be satisfied that during the 13th Edition of Toy Biz B2B (Business to Business) International Exhibition held at New Delhi from 2-5 July 2022, all the 96 exhibitors had showcased the diverse product category ranging from traditional plush toys, construction equipment toys, dolls, building block toys, board games, puzzles, electronic toys, educational toys, ride-ons, etc. All the toy products were “Made in India” products, manufactured domestically by small, medium and large enterprises. The toys bearing GI tag such as Chennapatna, Varanasi etc. were also displayed. Officials were happy that the exhibition was showcasing toys based on Indian ethos and value system duly endorsing the “Vocal for Local” theme. Evidently, there is no mindset to emerge as the world’s toy provider like China has emerged.
The effort to engage artisans in creating marketable toys based on educational and recreational needs of Indian children cannot serve as a sufficient tool to creating a vibrant toy manufacturing sector in the country.
The bulk of Chinese toy exports are produced for foreign brands on an OEM basis. Of late, because of rising costs, some manufacturing has shifted to other countries like Vietnam and India. In fact, the global toy maker Hasbro is the largest exporter of toys from India. Clearly, Hasbro is not selling Ramayana or Mahabharata based toys from India. There is a lot for the Indian policymakers to learn from such global manufacturers and use their advice in creating a vibrant toy manufacturing base in the country. Just a rhetorical salute from the Prime Minister to Indian children who bought local flavoured toys will not help. Toy policy needs careful introspection. Perhaps Niti Aayog can play a role here.