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The Union government is planning a 3,500 crore production-linked incentive (PLI) scheme for toys that comply with Bureau of Indian Standards (BIS) norms, an official said. The idea is to cut imports of unsafe toys from China and build domestic manufacturing capabilities.

This comes after a government survey in 2019 found that only 33% of a massive influx of toys from China were safe. Following this, several steps were taken, including issuing a quality control order and imposing higher customs duty on toys to prevent unsafe toys from entering the country.

“PLI for toys is at an advanced stage of discussion, and all kinds of BIS-compliant toys will be considered. A similar scheme is considered for the bicycles, leather and footwear industry. A number of industries are seeking PLI schemes, but the government’s selection process is focused on sectors where domestic manufacturing capacity is currently low, imports high, and where there is potential to enhance exports," the official cited above said on condition of anonymity.

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Data released by the commerce ministry also shows the value of toys imported by India fell from $371 million in FY19 to $110 million in FY22, a decline of over 70%.

Since 2020, the Centre has rolled out PLI schemes totalling about 2 trillion for as many as 14 sectors, including white goods, pharma, textiles, food products, solar PV modules, advanced chemistry cells and speciality steel. The objective of the scheme is to make domestic manufacturing globally competitive and create global champions in manufacturing. “In 2019, we saw a whole lot of toys made by Chinese firms coming in. They were all low-quality toys that could harm kids. In the market surveillance that was done, we found that out of 150 samples that we gathered, 33% were found to be safe. Import policy was changed. Only BIS-compliant toys were allowed. Plus, custom duty was raised from 20% to 60%. And then, we implemented the quality control order (QCO) on 1 January 2021," the official added.

In July, BIS published 10 Indian standards on safety aspects of toys related to physical safety, safety against chemicals, flammability and electrical safety, aiming to prevent the use of unsafe and toxic materials in the manufacturing of toys.

Out of the 10 standards, seven were part of QCO on ‘Safety of Toys’, which makes it mandatory that toys for children under 14 bear a standard mark (ISI mark) under licence from BIS, the consumer affairs ministry said.

Queries sent to the commerce and industry ministry remained unanswered till press time.

While the PLI scheme for large-scale electronic manufacturing has seen strong interest, the schemes for pharma API and textiles are yet to take off. The PLI for IT hardware has also found little success as manufacturing is yet to pick up as expected, experts said.

A Crisil report said implementing PLI will lead to a potential capex of 2.5-3 trillion over the scheme period and will account for 13-15% of average annual investment spending in key industrial sectors over 3-4 years.

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