Domestic toy manufacturers witness sharp rise in sales: Report

The decline in imports is also attributed to the rise in basic customs duties on imported toys from 20% to 60%

Domestic toy manufacturers are witnessing a massive surge in the sales of products after India recorded a dip in its imports from China following a tweak in rules last year.

In January 2021, India had banned the sale of toys that do not meet the requirements laid down by the Bureau of Indian Standards (BIS).

According to a report by the Business Standard, the ban on these products led to a 30 per cent decline in the overall import of toys in India. The imports of toys fell from $562.14 million in 2019-20 to $392.92 million in 2021-22. The decline in imports is also attributed to the rise in basic customs duties on imported toys from 20 per cent to 60 per cent.

Data by the Ministry of Commerce and Industry highlights that the Chinese products accounted for 71 per cent of the total imported toys in 2020-21. It eventually came down to 61 per cent in April 2022.

Chennai-based toy company Funskool told the publication that its sales have doubled in April 2022 which is the peak season for toy sellers, as compared to the last financial year. “We have seen the sales double, while all the domestic players are seeing a rise in sales as imports used to contribute around 80 per cent of the total market requirement earlier,” R Jeswant, CEO of Funskool said. He added that as a result of new regulations, international brands are looking to either manufacture toys in India or outsource them. Funskool, too, has recorded an increase in the exports of products from its stable such as Giggles, Fundough, and Handycrafts.

India, being one of the fastest-growing toy markets, is expanding at a compound annual growth rate of 13 per cent against the global average of 5 per cent. “Prior to Covid-19, the size of the industry in India was around $1.5 billion. Now, with imports down, that share is being taken over by domestic players replacing China. Their sales have increased manifold and more startups and SMEs are coming to the sector,” Ajay Aggarwal, president of the Toy Association of India (TAI) told the publication.

The BIS has so far granted toy manufacturing licenses to 800 manufacturers (approximately,) 90 per cent of which are micro, small, and medium enterprises.

“The BIS has made a lab compulsory for all units. Based on our request, a one-year exemption was given for this to micro players. We would like to seek an extension of two more years,” Aggarwal stated.

The BIS has also lined up a 50 per cent discount on the minimum marking fee charged by the bureau on each product for inspection and certification, to attract more MSMEs to the toy manufacturing sector. Additionally, it has also declared a 10 per cent rebate for old license holders.