3 min read.Updated: 10 Jan 2021, 01:09 PM ISTRouhin Deb
The Centre's support in the form of export subsidies, single window clearance, fiscal incentives, technology upgradation will help domestic toy manufacturing to grow swiftly
NEW DELHI: As India recovers from the covid-19 crisis, taking steps towards a new dawn, a host of envisioned and implemented reform measures taken during the pandemic could see tangible advances on ground in 2021. One among them is India’s vision of becoming a global toy hub to cater to domestic demand and tap the market that is estimated at $90 billion.
Given that 26% of India's population is under the age of 15, the domestic toy market is slated to grow to $3.3 billion by 2024 from $1.75 billion in 2019. The New Education Policy which focuses on vocational education in schools along with enhancing cognitive and psycho-motor skills will also encourage the global toy market to look to India as a manufacturing destination and realign supply chains.
A much-needed government boost to the global imprint of Indian toys is evident from its emphasis on bringing in transformative changes in the domestic toy industry by promoting “Vocal for Local" and “Make in India" under the Atmanirbhar Bharat scheme. The industry which is labour intensive could effectively compete against China and generate lakhs of jobs supporting the MSME sector. The government has taken several steps in the direction - from raising duties on imported toys, issuing quality control order that adheres to global safety standards, and coming up with a National Action Plan for the industry that aims to involve 14 central ministries on need basis and develop 13 toy clusters across the country, giving a major boost to the economies of the respective regions. The Centre is also planning a National Toy Fair as a part of the initiative to give a encourage domestic toy manufacturing.
Many state governments have already swung into action to help facilitate major toy making companies to set up manufacturing units in India. The country's first toy manufacturing cluster is coming up in Koppal across 400 acres of SEZ land, sanctioned by Karnataka government. The project is expected to attract ₹5,000 crore worth of investment and generate 40,000 jobs over the next five years. Uttar Pradesh government on the other hand expecting a ₹3,000 crore investment in the proposed 100-acre toy manufacturing hub in Greater Noida.
Gujrat has written to global toy manufacturers across the US, Canada, Europe, Japan urging them to set up industry in the state assuring them best possible assistance. Maharashtra which contributes 32.6% of the country’s toy exports has also proposed to set up clusters at Khalapur, Shahapur, Nashik, Malegaon, Solapur, among other places. The West Bengal EXIM association has sought land from the state government to set up a toy park in the state. Incentives at every step from setting up a plant and facilitating key resources at subsidized rates to incentivizing running costs, governments across various states are taking ease of doing business a notch higher to woo investors in the spirit of competitive federalism.
The Centre's support in the form of export subsidies, single window clearance, fiscal incentives, technology upgradation will help domestic toy manufacturing to grow swiftly. Another important aspect is re-skilling 4-5 lakh artisans in the country to help them catch up with evolving demands of the toy industry which is rapidly moving towards technology with AI (artificial intelligence) and IoT (internet of things)-enabled toys making major inroads.
With more engagement, skill diversification, and entrepreneurial enthusiasm, a revival of the Indian toy industry looks imminent. Companies such as Aequs, Funskool have already shown interest in coming up with manufacturing units in the country and if things go as planned, we would see many more global names setting up shop in the country, creating a huge employment opportunities for country’s youth.
(Rouhin Deb is an independent policy researcher and empirical economist.)