All the toys that Tejas received as birthday gifts – a monster truck, a musical mat, a Hungry Hippos game and a toy gun that emits sound and light — were Made-in-China. His birthday kitty reflects the reality of India’s toy industry – estimated to be worth just Rs 5,000 to 6,000 crore, making up less than 1% of the world market. It gets about 25% share of India’s toy market, the rest of it dominated by Chinese toys. If you remove Made-in-China toys from the market, local manufacturers will have to scramble to meet the domestic demand. Like, it’s happening now.
India-made toys cater to only 25% of the domestic toy market (File photo)
Due to the lockdown and an increase in import duty on toys, supply of Chinese toys to India has reduced, said manufacturers. “But at the same time, demand for toys has increased in the past three to four months because children are locked up at home and are demanding more toys.
All these factors have led to about 25% surge in domestic demand for toys, which we are trying to meet by scaling up production…but it will take us some time to do that,” said Ajay Agarwal, a toy manufacturer in Delhi and the president of the Toy Association of India, a body of toy manufacturers, exporters, importers and traders with over 500 industry members.
While organised manufacturers like Agarwal can scale up by automating or by hiring more labour, about 60% of India’s 3,500 toy manufacturers operate in the unorganised sector, from small units with sometimes as few as five employees. They don’t have the capital to suddenly increase production.
Indian market was not always dominated by Chinese toys which started flooding after liberalisation. As a result, many toy factories closed down in the past 30 years; they couldn’t compete with China-made toys, especially the electric ones.
“We lack equipment to make electric toys. For this we need to import machines from S Korea and Japan and right now they are expensive to get with a 34% import duty. If the government reduces the duty, we can start making electric toys as well. There’s great scope of growth in this industry,” said Agarwal. Indian manufacturers specialise in board games, soft and plastic toys, pull-along toys, play dough and puzzles.
But we have competent labour – toy-making is labour-intensive. If the imports come down, more and more investment will flow in,” said R Jeswant, CEO, Funskool India, a leading Indian toy brand.
At Kiddi Land, a toy shop in Amar Colony, south Delhi, up to 70% shelf space is taken up by Chinese toys and 25% by Lego, made in Denmark. “We also import from Thailand, Vietnam, Philippines…Indian toys are good but they don’t make electronic toys,” said Sanjay Pahwa, owner of this 40-year-old shop.
Suhasini Paul, a toy designer based in Delhi who has lived in China and visited many toy factories there said that the Chinese produce all kinds of toys, cheaper one to more expensive high-quality ones. “But due to budget issues our toy importers only bring cheap Chinese toys in India,” said Paul.
Manufacturers complain that retailers don’t give enough space to Indian toys. “With Chinese toys they earn better margins and therefore they prefer stocking them more,” said Manish Kukreja, CEO and director of Shinsei Toys and the president of All India Toy Manufacturers Association.
Kukreja added that if retailers reserve 25% space shelf for India-made toys, it will give a big boost to local manufacturing.