Future of fun: Insights into India’s growing toy market
Lost in the wilderness of doom and gloom for years, the Indian toy industry has now begun to make its presence felt in the global market, though, not as robustly as other Asian countries like China, Indonesia, South Korea, and Singapore
Indians are not unknown to toys, rather they have a rich history with toys. Emergence of toys can be traced back to the Indus Valley civilization that existed more than 5000 years ago.
Those days, toys were made of terracotta and clay. Figurines of monkeys, parrots, miniature farm carts were made of clay. For example, the dancing woman and small cart toys found in Mohenjo-Daro and Harappa offer sufficient evidence to prove that Indian ancestors had a thriving toy culture.
Promotion of toy industry
India’s toy industry is expected to grow to $2 billion by 2024 from $1.5 billion in 2022-23. To promote designing of toys based on Indian values, culture, and history, India has formulated a comprehensive National Action Plan. Initiatives like hackathons, restricting imports of sub-standard and unsafe toys, promoting indigenous toy clusters, boosting local manufacturing and incentivizing toy manufacturers are proving beneficial for the growth of the industry.
Steps like increasing custom duties on imported toys and mandating BIS certification requirements for imports have also contributed to the growth of the toy industry. According to the Ministry of Consumer Affairs, Food & Public Distribution, import of toys to India has declined from $332.55 million in 2014-15 to $109.72 million in 2021-22, a decrease of approximately 67%.
Schemes like extending credit support for the creation of new enterprises, technology upgradation, skill deployment and infrastructure development are working well for the toy industry in India.
Additionally, under Prime Minister’s Employment Generation (PMEGP), margin money assistance up to 35% of the project cost is being provided for setting up of a unit costing up to Rs. 50 lakh for manufacturing sector and Rs. 20 lakh in the service sector.
Under the Scheme of Funds for Regeneration of Traditional Industries (SFURTI), assistance is provided for creation of Common Facility Centres with latest machines, design centres, skill development, etc.
A total of 19 toy clusters have been approved under the scheme benefitting 11749 artisans with an outlay of Rs. 55.65 crore, Minister of State for Micro Small and Medium Enterprises Bhanu Pratap Singh Verma said in a written reply to the Upper House of Parliament on February 6.
Reasons for promotion of toy industry
The global market for toys is estimated to be around $100 billion. As of 2020, 85 % of the Indian market demand was sourced from Asian countries, predominantly China. Domestic manufacturing accounted for just 15% of the total Indian toy market.
In 2018-19, toys worth $ 371 million were imported into the country. A large proportion of these toys were unsafe, substandard, counterfeit, and cheap.
A surprise shopping exercise conducted in 2019 revealed that only 33% of toys in the domestic market were of acceptable quality as per BIS standards. The large imports of cheap and substandard toys were not only harmful to children but were also affecting the domestic industry adversely.
Push to boost domestic toy industry
To promote the toy manufacturing sector, toy fairs and national Toycathons are organized. Toycathon is the first-of-its-kind hackathon to develop indigenous toys and games highlighting India’s culture, history, and mythology. Various organizations like the Department of Promotion of Industry and Internal Trade (DPIIT) and the Bureau of Indian Standards (BIS) joined the movement.
Even state governments like the government of Karnataka, Maharashtra, Gujarat and West Bengal have pitched in to develop the toy manufacturing industry.
It has resulted in import of toys declining significantly in the last three years, while export of toys increased by 61%. Export of products such as plastic scooters, pedal cars, dolls' carriages, dolls, puzzles has increased by nearly 70% from $62.4 million in 2018-19 to $ 99.9 million in 2021-22.
Current landscape of toy market
Demand for toys based on Indian mythological characters, local movie characters and superheroes such as Chhota Bheem is on the rise in the country. According to a joint report by FICCI and KPMG, the Indian toy market, which was estimated to be around $1billion in 2019-20, is expected to double to $2 billion by 2024-25.
The report published in 2021 said that India, which could target a 2% share of the global toy market by 2025, has a high growth potential in the exports of plastic toys and board games in the US, the European Union, the Middle East and other markets.
On the other hand, Statista, a Hamburg-based market, and consumer data firm, said India’s toys and games segment generated $38.62 billion in revenue in 2022. Although the analysis bundles the toys industry with the games industry, there is no doubt that the former has witnessed explosive growth recently.
India is emerging as a toy powerhouse, a feat that has taken fewer than five years to achieve. The toy industry now claims a larger share of the country's GDP through direct and indirect employment and exports.
However, the success did not come easily. A lot of effort from the government, including financial incentives, has ensured domestic toy manufacturers can compete favorably in the global market.
But one must acknowledge the country's rich heritage of toys that extends into the prehistoric era. If the government support continues and the country's middle class keeps expanding at the current rates, one may not be wrong to posit that India's toy industry will achieve a gigantic success in the coming years.
***The author is a Surat-based journalist; views expressed are her own