India's Toy Industry Transformation: From Imports to Exports

The Economic Survey reveals that government initiatives, including mandatory quality norms and increased customs duties, have bolstered India's toy industry by reducing dependency on Chinese imports and boosting exports. Comprehensive efforts such as the National Action Plan and potential production-linked incentives have transitioned India into a net exporter of toys.

The government's steps such as mandatory quality norms and an increase in customs duties have significantly assisted domestic toy companies in boosting exports and reducing reliance on Chinese imports, according to the Economic Survey released on Monday.

The report highlighted that India's rise as a toy-exporting nation can also be attributed to its seamless integration into the global value chain and zero-duty market access for domestically produced toys in key countries like the UAE and Australia.

Historically, the industry has been a net importer of toys, relying heavily on China, which accounted for 76% of imports. However, rising exports and declining imports have transformed India from a deficit to a surplus nation in toy trade. India's toy import bill from China dropped from USD 214 million in FY'13 to USD 41.6 million in FY'24, significantly reducing China's market share from 94% to 64% during this period.

Government initiatives have included a National Action Plan for Toys, increased customs duty on imports, sample testing to curb sub-standard imports, and the consideration of a production-linked incentive (PLI) scheme. These measures have doubled the number of manufacturing units between 2014 and 2020.

Naresh Kumar Gautam, Senior Vice-President of the Toy Association of India, expressed optimism about continued growth in toy exports. Additionally, India has also made significant strides in becoming a key player in the global arms export market, reaching the top 25 arms exporting nations.

Furthermore, India's smartphone sector has also seen substantial growth, with a 42% increase in exports in 2023-24, becoming the world's sixth-largest exporter of smartphones in 2022, up from 23rd in 2014.