Toy Economy: No Child’s Play

India has a rich heritage of toy manufacturing, with historical evidence dating back to around 5000 years. There were tiny carts, dancing women, and other items among the archaeological toys and dolls discovered in Harappa and Mohenjo-Daro. According to the Indian tradition, toys were used to illustrate both contemporary and historical narratives. Today, India boasts a diverse range of indigenous toys, encompassing folk toys, wooden toys, dolls, and toy archery.

To fuel India's economic growth, the government has implemented measures to promote domestic toy production. The recent decision to raise the import duty on toys and their components to 70 per cent in the Budget 2023-24 exemplifies the government's commitment to bolstering the toy industry's role in India's development. This action builds upon previous steps, such as the increase in basic customs duty on toys from 20 per cent to 60 per cent in February 2020. The government has realised the significant potential that the toy industry has in promoting India’s development.

The concept of "Toyconomy" emerged during Toyotathon-2021, where Prime Minister Narendra Modi highlighted the economic benefits of toys and games. With a growing young population and increasing disposable incomes, the domestic toy market is valued at $1.5 billion. In ancient times, toys were made using bamboo sticks, clay, cloth and other soil like material. However, nowadays almost all kinds of toys ranging from action figures to animals, construction to electronic toys, dolls to cars are being manufactured and sold in India. The demand for toys, including educational ones, is on the rise, outpacing the global average. Medium and small enterprises play a leading role in this sector's growth.

In September 2022, the government implemented a noteworthy measure aimed at enhancing the toy industry and reaping advantages from it when the Ministry of Housing and Urban Affairs (MoHUA) initiated a unique competition named "Swachh Toycathon" as part of the 'Swachh Amrit Mahotsav' campaign. The objective of this competition was to encourage the development of innovative solutions that utilise waste materials for toy creation or manufacturing. This initiative was a significant stride towards addressing both the escalating demand for toys and the mounting issue of solid waste.

India's toy industry has made remarkable strides on the global front. Toy exports have witnessed a substantial increase, rising from $36.91 million in 2013-14 to $153.88 million in 2022-23, reflecting a notable growth of 36 per cent. Through initiatives like "Make in India," India has transitioned from being a net importer to becoming a net exporter of toys. In the fiscal year 2023, toy exports reached Rs 1,017 crore from April to December, further underscoring the industry's potential. In the words of Piyush Goyal, Minister of Commerce and Industry, "Made in India toys continue to tap global markets! India's toy exports rose more than 6 times in April-December 2022 as compared to the same period in 2013”. According to Invest India, the Indian toy market is expected to develop at one of the highest rates in the world, with a compound annual growth rate (CAGR) of 12 per cent from 2022 to 2028, to reach $3 billion. The portal also claims that 4,000 MSMEs are engaged in the toy manufacturing industry. This presents an excellent opportunity for India to enhance its performance in international trade and reduce the influx of low-quality imports from countries like China.

In an interview with Financial Express, Manu Gupta, the chairman of the Toys Association of India, claimed that the government's revision of the import levy on toys to 70 per cent has boosted domestic manufacture. 'Quality Control Order' was also introduced to control toy quality in compliance with the Bureau of Indian Standards. Toys must comply with all applicable Indian standards and display the standard mark in order to be sold in India. This rule applies to both domestic and foreign toy makers. The National Action Plan for Toys, initiated in 2020, gathered 15 ministries together and gave toy makers energy. 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.

Due to their inherent low prices and rising demand, labour-intensive toy categories including dolls, soft toys, and board games have tremendous manufacturing opportunities for India. Despite its rapid growth, the toy business in India still confronts several challenges, such as a dearth of creativity, a large number of local manufacturers, increase in the cost of raw materials and a lack of critical equipment that has become more expensive due to an increase in import duty. China, which continues to dominate the market, is a significant competitor for India as local production prevents Indian manufacturers from achieving economies of scale.

The toy sector offers a promising future and has the capacity to revolutionise the Indian economy, emphasising the need for continued support and innovation. In order to enhance India's toy economy, the government must develop practical measures to address the aforementioned challenges. Artisans should be trained in new skills to overcome the issue of diminished creativity. The toy industry should be organised and regulated. The government's assistance, in the form of export incentives and guidance on technological advancements, can greatly contribute to the rapid growth of the domestic industry. The toy economy has emerged as a catalyst for India's progress. Backed by robust government initiatives, a rich manufacturing heritage, growing domestic and international demand, and a resilient entrepreneurial spirit, the Indian toy industry is poised for transformative growth, positioning itself as a significant contributor to the nation's economic advancement.

Divya Singh Rathore, a public policy professional. She tweets at @_divyarathore

Suhani Jain is an undergraduate student pursuing B.A. (Honours) Economics at Lady Shri Ram College for Women, University of Delhi and currently holds an internship position at NITI Aayog.