Government to launch new incentive schemes to promote domestic toy industry; Move to create more jobs in the sector

The Indian government is planning to incentivise the local toy manufacturing industry so that more jobs get created and the sector gets a push. The decision has come after recent measures to help the industry, like raising import tariffs to reduce cheaper foreign products and bringing in stringent quality standards for imports.

One important measure the government has been mulling for some time is promoting local production of toys, said the Secretary of the Department for Promotion of Industry and Internal Trade, Rajesh Kumar Singh.

“We (will) bring about further incentives which could kick-start this emerging and dynamic part of our overall manufacturing ecosystem,” said Singh.

However, the Secretary did not clearly say if the toy manufacturing industry would be part of the ₹1.97 trillion Production Linked Incentive (PLI). The proposed budget for this scheme is ₹3,489 crore, and it will run from 2024-25 to 2031-32.

The interim budget for FY 2024 had a token amount for PLI for toys, but more details will be out only when the cabinet approves it.

India’s toy imports plunged drastically after the increase in tariffs and tightening of the noose with Quality Control Orders (QCOs). Toy imports had a steep fall to ₹6.49 crores last financial year from ₹30.41 crores in 2018-19. On the other hand, Indian exports scaled moderately to ₹15.234 crores last financial year from ₹12.96 crores in FY 20.

India imposed high import duties on toys in February 2020, with the basic customs duty raised from 20% to 60% and again hiked to 70% in July 2021.

The government has so far introduced various initiatives to promote the toy industry, including the National Action Plan for Toys (NAPT), which aims to encourage local manufacturing and provide incentives to toy makers.

India ranks second in the world in producing polyester and related fibres used in toy manufacturing. In Indian toy factories, labour costs make up about 20% to 40% of the total expenses.