Toy makers mull cluster to cut import dependence

Vijay C Roy

Tribune News Service

Chandigarh, March 12

Toy makers in the northern region are exploring opportunity to set up a dedicated cluster for manufacturing amid growing dependence on China. The Indian manufacturers, mostly in the small scale sector, cater to only around 15% of the domestic demand. The remaining 75-80% demand is met through imports from China and 5-10% through other countries.

According to estimates, over 80% of the Indian domestic market is catered to by North India-based manufacturers. Also, the manufacturers of technical toys in India are dependent on China for PCBs, batteries and other high-tech circuits.

As supplies from China have been hit due to coronavirus outbreak, the manufacturers are exploring options in the Delhi-NCR region, preferably in Haryana or Uttar Pradesh, to set up the cluster where around 200 units could be set up.

They are looking for 50 acres and have already written to the two state governments in this regard.

“We are heavily dependent on China for making toys. Further, in the Budget, the government had increased customs duty on toys on dolls and puzzles of all kinds to 60% from 20% to boost domestic manufacturing. This is a good opportunity for the Indian manufacturers to set up the cluster,” said Vipin Nijhawan, proprietor, SR & Sons.

“The Toy Association of India has written to a letter to the Haryana and Uttar Pradesh government to provide land at concessional rates so that we can commence production on mass scale. If everything goes well, in next 4-5 years, the share of domestic toy makers may increase from 15% to 30-40%,” he added.

The Indian toy industry currently doesn’t have viable ecosystem to support production on large-scale and lack resources for innovation to compete with the Chinese manufacturers in terms of volume, design, finish and pricing. However, the manufacturers feel setting up of the cluster will go a long way in promoting made in India products.

According to the manufacturers, the toy industry in India is projected to grow to $3.3 billion by 2024. With changing times, parents and children have moved towards innovative electronic, intelligent, plush toys and role play-oriented sets. Educational toys, ride-ons, construction and building sets, dolls and board games also find equal favour.

The industry is, however, going through a challenging phase, as imports are stuck due to coronavirus outbreak and manufacturers, traders and retailers are incurring losses due to high tariffs.

“The import duty on toys is a direct attack on the development of Indian children as it denies them the right to play, learn and grow. The hike in import duties can make these toys unaffordable for customers”, said Farooq Shabdi, president of the United Toys Association.