Context: India turning a net exporter of toys is mainly due to rising protectionism and less, perhaps, on account of expanding domestic capabilities.
Observations
India has recently turned a net exporter of toys, during 2020-21 and 2021-22, ending decades of import dominance. Between 2018-19 and 2021-22, toy exports increased from $109 million (₹812 crore) to $177 million (₹1,237 crore); imports declined from $371 million (₹2,593 crore) to $110 million (₹819 crore).
About the toy industry:
- In 2015-16, the industry had about 15,000 enterprises or establishments, producing toys valued at ₹1,688 crore using fixed capital of ₹626 crore at current prices and employing 35,000 workers.
- Registered factories — those employing 10 or more workers on a regular basis — accounted for 1% of the number of factories and enterprises, employed 20% of workers, used 63% of fixed capital, and produced 77% of the value of output.
- Global share of Indian toys is less than half a percent.
Why such a trend?
- Due to Make in India initiative since 2014, toy industry has registered high annual growth rates.
- Imports contracted as the basic custom duty on toys (HS Code-9503) tripled from 20% to 60% in February, 2020.
- Numerous non-tariff barriers were imposed as well such as production registration orders and safety regulation codes.
- COVID-19 created a new demand for Indian toy exports.