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How India Increased its Toy Manufacturing?

India has been trying to increase its toy manufacturing industry for several years now, aiming to become a serious competitor to China, which is the world's largest producer of toys.

In 2020, PM Modi was sad that Indian markets are flooded with Chinese toys. So, he set out to destroy China's monopoly in toy manufacturing and Today India's toy exports have gone from 300 crore to 2600 crore in just 2 years. Here's how he's making India a toy superpower:


1. New Government Incentives


In March 2020, the Indian government announced PLI scheme for various sectors, including toys. The scheme aims to provide incentives to manufacturers to produce more locally and increase the country's manufacturing capabilities. The government allocated INR 100 crores (approximately $13 million) for the toy sector under this scheme. The PLI scheme is expected to attract new investment in the toy industry and create more job opportunities.


PLI scheme, launched in March 2021, is expected to attract investments of over INR 10,000 crore over the next five years and is projected to create over 2.5 lakh direct and indirect jobs in the toy manufacturing industry.

Toycathon India
Toycathon 2021

To promote innovation and entrepreneurship, the government also launched a challenge called 'Toycathon.' This challenge invited participants to submit ideas and designs for toys, which could be manufactured in India. The challenge aimed to encourage creativity and innovation in the toy industry, and the winners would receive funding and support to turn their ideas into reality. The Toycathon challenge, launched in January 2021, received over 17,000 entries from students, teachers, and start-ups across the country.


2. Increasing Custom Duty


In February 2020, the government hiked customs duty on toys from 20% to 60%, with an aim to promote ‘Make in India’ and boost domestic manufacturing. However, this has also affected the toy business in India, as many importers and retailers have faced challenges due to higher costs and lower demand.


3. Promoting Toy Clusters


To promote toy manufacturing in India, the government has identified 8 toy clusters at a cost of Rs 2,300 crore to boost India’s traditional toys industry. These clusters will manufacture toys made of wood, lac, palm leaves, bamboo, and fabric.


Two toy clusters are currently being implemented in Karnataka and Andhra Pradesh under the Sfurti scheme, which offers incentives such as skill development, capacity building, creation of facilities such as common facility centres, rehousing facilities and marketing and e-commerce assistance to local industries.


The government has planned to provide infrastructure and other facilities to these clusters to help them grow and compete with Chinese imports. The government has also set up a toy task force to provide support to these clusters and encourage local manufacturing.

India's Toy Imports Drop, Exports Surge; Shows Promising Self-Reliance

Increase in Foreign Investment


Companies like Mattel, Hasbro, and Lego have set up manufacturing units in India. Mattel, for example, has set up a manufacturing unit in Ranipet, Tamil Nadu, with an investment of INR 100 crore. Lego has also announced plans to set up a manufacturing unit in India, which will become the company's largest manufacturing facility outside of Mexico.


Despite these initiatives, India still has a long way to go to become a serious competitor to China in the toy industry. According to the Indian Toy Manufacturers' Association, India's toy market is worth about $1.5 billion, while China's toy market is worth over $40 billion. China's dominance in the industry is due to several factors, including its large domestic market, efficient supply chains, and low production costs.


India has several advantages that it can leverage to compete with China. India has a large and growing middle class, which presents a significant market for toys. According to a report by Research and Markets, India's middle class is expected to double to 600 million by 2025. India also has a young population, with about 40% of its population under the age of 18, making it a potentially significant consumer base for toys.


India's toy industry has the potential to become a global supplier of toys. The country has a rich heritage of traditional toy-making, which is now being combined with modern manufacturing techniques.

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