Hindu Editorial Analysis : 31-May-2023
India has made significant strides in the toy sector in recent years, transitioning from a net importer to a net exporter. This achievement has marked a turning point in India’s toy industry and has been attributed to various factors such as historical linkages, the sector’s potential, and government initiatives.
Historical Linkages: The Rich History of Indian Toys
India has a rich history of toy manufacturing dating back to the Indus Valley Civilization, approximately 8,000 years ago. The toys of that era were crafted from natural materials like bamboo sticks, hay, clay, rocks, and fiber cloth. These toys included whistle-shaped parrots, toy monkeys with long hands, and miniature farm carts.
Current Scenario: Expanding Toy Sector in India
With the advent of progressive technology and mechanisms, Indian companies have been spurred to produce fresh and inventive toys. The country’s toy sector is capitalizing on a growing young population, rising disposable incomes, and a plethora of innovations for children. There are significant opportunities in various toy segments such as electronic toys, puzzles, construction and building toys, dolls, ride-ons, sports and outdoor play toys, infant/preschool toys, and activity toys.
Achievements: From Import Dominance to Net Exports
India’s toy exports have seen remarkable growth in recent years. Between 2018-19 and 2021-22, toy exports increased from $109 million to $177 million, while imports declined from $371 million to $110 million. This shift can be attributed to rising protectionism and the expansion of domestic capabilities. The success of India turning into a net exporter of toys can be credited to the “Make in India” initiative launched in 2014, along with related policies.
Issues and Challenges: Overcoming Obstacles
Despite recent achievements, the Indian toy industry faces several issues and challenges. The industry’s output was halved in real terms between 2000 and 2016, resulting in significant job losses. Imports have historically accounted for up to 80% of domestic sales, while India’s share in the global toy trade remains minuscule, at a mere half a percentage point. The Indian toy industry has witnessed negative productivity growth, and toy manufacturing has remained stagnant, archaic, and fragmented compared to the importation of modern, safe, and branded toys.
Global Competitors: Learning from Successful Nations
Historically, Asian countries like Japan, China, and Vietnam have promoted toy exports to generate employment opportunities. India can learn from their success stories and develop strategies accordingly to enhance its toy industry.
Steps Taken by India: Promoting Domestic Production
To overcome challenges and promote domestic toy production, the Indian government has implemented various measures. Some of these include:
- Prime Minister’s Employment Generation Programme (PMEGP): Providing margin money assistance for manufacturing units to boost employment.
- Scheme of Funds for Regeneration of Traditional Industries (SFURTI): Assisting in the creation of Common Facility Centers and skill development to enhance productivity.
- Directorate General of Foreign Trade (DGFT): Mandating sample testing of toy consignments to ensure quality and safety.
- Toys (Quality Control) Order: Making Bureau of Indian Standards (BIS) certification mandatory for toys, ensuring adherence to quality standards.
- National Action Plan for Toys (NAPT): A comprehensive support plan that brings together various ministries and departments to promote the “Vocal for Local” campaign in the toy sector.
- 100% FDI: Allowing 100% Foreign Direct Investment (FDI) under the Automatic Route to attract international investment and expertise.
Why In News
India, breaking the shackles of import dependence, has emerged as a flourishing hub for toy production, proudly transforming into a net exporter in both the fiscal years of 2020-21 and 2021-22. This remarkable shift not only boosts the country’s economy but also showcases India’s growing prowess in the global toy market.
MCQs about India’s toy industry
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Which factor has contributed to the expansion of India’s toy sector?
A. Historical linkages with toy manufacturing
B. Rising protectionism in the global market
C. Decrease in disposable incomes
D. Limited innovation for the junior population base
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What has been the trend in India’s toy exports and imports in recent years?
A. Both exports and imports have significantly increased
B. Exports have increased, while imports have decreased
C. Exports have decreased, while imports have increased
D. Both exports and imports have remained stable
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What is one of the challenges faced by the Indian toy industry?
A. Limited market demand for toys
B. Lack of government support and initiatives
C. High production costs
D. Negative productivity growth
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What measures has the Indian government taken to promote domestic toy production?
A. Imposing strict import restrictions on toys
B. Providing financial assistance and support to toy manufacturers
C. Encouraging more toy imports to meet domestic demand
D. Implementing policies to increase toy exports only
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