During the August 2020 Mann ki Baat address to the country, Prime Minister Narendra Modi expressed his desire to establish India as a global toy hub. He stressed on the need for increasing international footprint, achieving organic synergies across demographics, and leveraging availability of raw materials and artisan skillsets to achieve this goal. To this end, the National Action Plan 2020 was introduced to promote the toy industry including traditional handicrafts and handmade toys.
The Indian toy retail market was valued at ~Rs. 16,000 crore (US$ 2.2 billion) in 2020, which accounts for <1% of the global market. Currently, 85% of the domestic demand for toys is met through imports—80% imports are from China, while the remaining are sourced from Sri Lanka, Malaysia, Germany, Hong Kong and the US. In comparison to import volumes, India’s toy export merely stands at Rs. 730 crore (US$ 100 million). This trade deficit is alarmingly large, given the potential for India to be self-reliant in an industry that is likely to grow at 10-15% against the global average of 5%.
National Action Plan
The Government of India developed a comprehensive action plan in 2020 to boost local manufacturing and incentivise toy and handicraft manufacturers to make India the next global hub. The following action items were outlined in the plan to support the toy ecosystem:
- Setting up toy production clusters across the country
- Launching central government schemes to incentivise manufacturing and exports
- Strengthening the R&D infrastructure for toys and games promoting self-discovery and self-learning
- Integrating toys and games with education, specifically for subjects such as mathematics, history and science
- Increasing awareness among consumers via outreach campaigns to boost purchase of local toys
- Promoting innovation & design and upskilling artisans
- Creating a working group for ‘Ek Bharat Shrestha Bharat’
- Meeting crowdsourcing procurement needs to boost demand
- Utilising analytics and digital marketing tools for targeted brand promotions
- Organising hackathons and grand challenges to encourage design and innovation
- Building toy repository centres
- Promoting development of digital and online games
- Developing toy laboratories to test and monitor quality & safety standards
- Organising annual toy fairs and exhibitions across production hubs
- Focusing on production of mechanical and electronic toys
- Observing an annual ‘Made in India Toy Day’ in schools
- Strengthening awareness and production of indigenous toys such as puppets, wooden dolls, clay toys and tribal games
- Airing special programmes on toys and games on public broadcast channels such as Doordarshan (DD) and All India Radio (AIR)
- Promoting toys made with recycled and upcycled materials
- Developing an e-commerce platform to provide a centralised direct marketing portal to handicraft artisans
- Building India’s first ‘Toy Museum’
The ‘National Action Plan’ was commissioned by the Department for Promotion of Industries and Internal Trade (DPIIT) under the Union Ministry of Commerce and Industry; however, this programme will be implemented in collaboration with 14 central ministries, including education, textiles, railways, science and technology, and information and broadcasting.
In line with the national initiative to promote the domestic toy industry, the government plans to organise a National Toy Fair between February 27, 2021, and March 03, 2021. The fair will be organised on the virtual platform of the Export Promotion Council for Handicrafts (EPCH). The Ministry of Textiles will be serve as the nodal body for organising the fair annually. This move aligns with the government’s efforts towards making India a self-reliant economy and attracting foreign investments in the sector.
The fair is likely to showcase 75 stalls by the Department of School Education and Literacy (DoSEL), Indian Institute of Technology Gandhinagar’s (IITGn) Centre for Creative Learning (CCL), Ministry of Education, National Council for Educational Research and Training (NCERT) and State Council for Educational Research and Training (SCERT). These institutes will exhibit >200 new designs of toys and models to domestic and international players.
To promote toy manufacturing among domestic players, particularly rural entrepreneurs, the Common Service Centre (CSV), a special purpose vehicle (SPV) under the Ministry of Electronics and IT, has joined forces with the All India Council for Technical Education (AICTE) to organise ‘Toycathon 2021’. This concept is envisioned as a first-of-its-kind hackathon to develop indigenous toys and games highlighting the India’s culture, history and mythology.
The inter-ministerial initiative is a collaboration of six ministries—Ministry of Education, Ministry of Women and Child Development, Ministry of Commerce and Industry, Ministry of MSME, Ministry of Textiles and Ministry of Information and Broadcasting, along with Common Service Centre (CSV) and the All India Council for Technical Education (AICTE). It aims to invite students, teachers, start-ups, toy experts and professionals to innovate and submit feasibility assessments for local manufacturing of creative toys, games and concepts.
Toy Cluster Programme
90% of the Indian toy industry is unorganised with >4,000 micro, small and medium enterprises operating across the country. Most toy manufacturers are in Delhi NCR, Maharashtra, Karnataka, Tamil Nadu and small clusters across other central Indian states. To streamline this sector, the government announced the ‘Product Specific Industrial Cluster Development Programme’ in 2020 to build toy clusters on dedicated SEZs and help them become customised, self-sustained ecosystems catering to export markets. Moreover, the government is also providing incentives at each step, from setting up a plant and facilitating key resources at subsidised rates to incentivising running costs with the single goal of attracting investments and building export capacity.
Several state governments have swung into action and allocated dedicated areas for building toy city and park clusters. Karnataka is creating India's first toy cluster in Koppal district in partnership with Aequs Infra—which provides state-of-the-art industrial infrastructure (with power, water, internal roads and waste disposal and common facilities such as customs, security and a centre of excellence). The cluster is likely to create 40,000 jobs in the next five years and attract investments worth >Rs. 5,000 crore (US$ 685 million). On the other hand, the Uttar Pradesh government is expecting a Rs. 3,000-crore (US$ 411 million) investment for a proposed 100-acre toy manufacturing hub in Greater Noida. Meanwhile, the Gujarat government has written to global toy manufacturers in the US, Canada, Europe and Japan, urging them to set up shops in the state by assuring them the best possible assistance. Maharashtra, which contributes 32.6% of the country’s toy exports, has also proposed clusters at Khalapur, Shahapur, Nashik, Malegaon and Solapur. The West Bengal EXIM association has sought land from the state government to set up a toy park.
The Road Ahead…
Among the initiatives being taken, the Prime Minister’s clarion call for ‘vocal about local’ appears to be the focal point of the revival approach. The push for production will leverage India’s industrial strengths in polyester and fibre production, technical know-how in precision tooling, ready-made structure manufacturing, electronic and remote-controlled production capabilities, affordable labour costs and large pool of semiskilled/skilled workers and artisans. This makes toy manufacturing an ideal focus area for resuscitating a struggling economy.