News Excerpt:

India’s toy industry made rapid strides between FY15 and FY23 with exports increasing by a whopping 239 percent and imports declining by 52 percent, resulting in the country becoming a net exporter.

About the news:

• Global brands like Hasbro, Mattel, Spin Master, and Early Learning Centre, etc depend more on the country for sourcing.
  • Major manufacturers like Italian major Dream Plast, Microplast, and Incas are gradually shifting focus to India from China.
  • Ten years ago, hardly any sourcing was happening from India, now many companies have set up a base in India.
• Imports have been greatly replaced by domestic Indian products.

Major reasons behind the toy industry boom:

• Compliance with Indian Standards: A mandatory requirement of the Bureau of Indian Standards (BIS) approval for the sale of toys in India.
• Protectionism: An increase in basic customs duty to 70 percent has led to a boom in India's toy industry. 
• China-Plus-One strategy: It is a global business strategy, in which companies avoid investing only in China and diversify their businesses to alternative destinations. Many of the buyers, who were sourcing from China, are trying to shift to other countries and India is one of them.

Indian Standards on Toys:

• BIS has published several Indian Standards on the safety of toys (prescribing requirements for physical, chemical, and electrical safety of toys). 
• These Indian Standards are aligned with the existing International Standards for toy safety i.e., Standards formulated by the International Organization for Standardization (ISO) and International Electrotechnical Commission (IEC).
• The Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, Government of India, has issued the Toys Quality Control Order (QCO), 2020, under Section 16 of the BIS Act, 2016. 

• The QCO came into effect on January 1, 2021. 

• This Quality Control Order makes it mandatory for children’s toys to conform to 7 Indian Standards for the safety of toys and bear the ISI Mark under a license from BIS. 
• To support the domestic industry, the government raised the basic customs duty on toys from 20 percent to 60 percent in February 2020. 
• This was further increased to 70 percent in March 2023.

Significance of these standards for toys:

• The Toys QCO and BIS standards on toys play a crucial role in ensuring the safety of toys for children. 
• With the strict enforcement of the Toys QCO, BIS has significantly improved the level of compliance of toys with safety standards.
• According to ‘The Toy Association of India (TAI)’, the BIS rules must be further relaxed to support micro, small, and medium enterprises. 
• The association said that out of the 6,000-odd toy manufacturing units in the country, only 1,500 have obtained a BIS licence.

Key Facts about the Toy Industry in India:

• Toys have been recognised as one of the champion sectors with significant export potential. 
• Labor-intensive toy categories like dolls, soft toys, and board games offer significant manufacturing potential in India due to inherent cost competitiveness and growing demand. 
• Government Incentives: The Government of India is planning to provide comprehensive support to promote 'Vocal for Local' in toys through the National Action Plan for Toys (NAPT) by bringing together 20+ Ministries/ Departments. 
• According to a market research firm IMARC’s report, India's toy industry was valued at $1.7 billion in 2023 and is expected to reach $4.4 billion by 2032, exhibiting a growth rate of 10.6 percent.
• The Indian toy industry is among the fastest-growing globally.
• Many startups are emerging, and Gujarat is fast becoming a toy manufacturing hub.