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New incentive scheme for toy manufacturing soon

June 15, 2024
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This year’s interim budget provided a token amount for PLI for toys but details will be spelt out when cabinet approval is in place.

The Government is considering launching an incentive scheme to boost domestic manufacturing of toys, keeping in view the high employment potential of the sector. This follows a series of steps taken over recent months to support the industry, including hike in import tariffs to curb inflow of cheaper products from abroad, and tightened quality norms for imports. This year’s interim budget provided a token amount for PLI for toys but details will be spelt out when cabinet approval is in place. After the tariffs were increased and Quality Control Orders (QCOs) were put in place India’s toy imports decreased drastically to $ 64.9 million last financial year from $304.1 million in 2018-19. India’s exports, however, increased modestly to $ 152.34 million last financial year from $ 129.6 million in FY 20. India dramatically raised import duties on toys beginning in February 2020. The basic customs duty was increased from 20% to 60% and then to 70% in July 2021.

The share of imports from China dropped from 87% ($ 304.1 million) of India’s total toy imports in FY 19 to 64% ($ 41.5 million) in FY 24. There was an increase in imports from other regions such as ASEAN countries, Sri Lanka, and the Czech Republic. The government has taken many other steps for development of the toy industry including the National Action Plan for Toys (NAPT) to promote local manufacturing and incentivize manufacturers. The National Action Plan for Toys and other initiatives has had a good impact, but we need to do much more, Mr. Singh said at the “Workshop with Flipkart and Indian Toy Industry” conducted by DPIIT to discuss how emerging opportunities from the e-commerce marketplace can be leveraged to bolster the growth of the toy industry. Joint Secretary in the DPIIT Mr. Sanjiv said that the workshop was aimed to help the toy manufacturers understand the nuances of online selling which shall in turn help in the growth of sales and market access.

The issues which figured in the workshop included ways to increase sourcing by online platforms, onboarding of manufacturers on the Flipkart platform and upskilling. It was also discussed supporting online selling, scaling domestic consumption and upskilling/reskilling workforce. The secretary offered support to e-commerce companies on regulatory matters, if they can show effort on their part to encourage export of Made in India products. Mr. Sanjiv said that the workshop was aimed to enhance India’s position and capabilities in the global toy supply chain. It will help the toy manufacturers understand the nuances of online selling which shall in turn help in the growth of sales and market access.

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