Far from fun and games, India's toy story looks to govt to script a change

Currently, the domestic toy market share is small, about 25%, with China claiming the dragon’s portion, says Ajay Agarwal, president of the Toy Association of India
In 1971, when an American space team went on a mission to the moon, Indian toy manufacturers created little plastic replicas of the Apollo 15 shuttle as well as the moon buggy. Demand for both the miniatures was so high, remembers retailer Sanjeev Mehta, that he had to go to the factory every other day to load up on stock and bring it back to his toy shop in the upscale Khan Market in New Delhi. Mehta, who is president of the Khan Market Traders’ Association and owner of four toy stores, says sadly those days when local toy-makers could move this fast and churn out products are a thing of the past.

India’s toy industry has not evolved the way it could have, which is why Mehta says that while Prime Minister Narendra Modi’s advice to entrepreneurs to “team up for toys” — make toys and games in India and based on India — is welcome, it will need to have a plug-and-play approach. During his Mann ki Baat address on Sunday, Modi had also lauded Karnataka’s efforts in creating a toy manufacturing hub in Koppala. 

One of the government’s decisions is that from September 1, all toy manufacturers and importers need a Bureau of Indian Standards (BIS) licence to manufacture and import new toys. The All India Toys Federation (AITF), while encouraged that Modi spoke about the toy industry, expressed apprehension that micro, small, and medium enterprises engaged in the toy business would not be able to adhere to these standards right away. “We’d be left with only big MNCs, who will sell expensive branded toys in their store chains,” says AITF Vice President Abdullah Sharif. The federation adds that the Indian toy industry is currently struggling with a large-scale slump in demand and issues stemming from economic uncertainties.

According to the All India Toy Manufacturers’ Association, the country’s toy market is worth around Rs 4,000 crore. The central government’s National Productivity Council puts the figure at an estimated Rs 8,000 crore, of which over 60 per cent is unorganised. 

Manu Gupta, director, Play Grow, a maker of indoor and outdoor toys that include swings, seesaws and electric cars, says there’s an opportunity here, provided a few factors are kept in mind. “The toy market is populated by foreign makers, many of whom sell electronic products and whose toys fall in the luxury segment. To compete with them, we would need design and innovation centres as well as a rationalisation of GST (Goods and Services Tax),” he says. Electronic toys command a GST of 18 per cent, while regular toys are taxed at 12 per cent GST. The industry wants it reduced to 5 per cent, or lower.

Currently, the domestic toy market share is small, about 25 per cent, with China claiming the dragon’s portion, says Ajay Agarwal, president of the Toy Association of India. And while India has between 300 and 500 organised players, there are thousands in the unorganised sector, and they deal largely in wooden, plastics and electronics toys, he says, adding, “A national policy promotion board would go a long way in supporting the sector.”

The mood in the toy market, meanwhile, is somber. Business is slow. A lot of toys for younger children, such as blocks or grasping toys, focus on touch and feel, essential for the child’s mental and motor skill development. But with the emphasis on keeping the environment around us sanitised, given the raging pandemic, parents are wary of handing toys that children might put in their mouths.

This dip in enthusiasm is visible at the usually bustling Hamleys store in Worli, Mumbai. There are only a handful of children accompanied by their parents walking around the store, which sells everything — from playdough to drones. The British toy retailer, which Reliance Brands bought in 2019, also sells high-end motorised toys, some of which cost as much as an entry-level motorcycle. 

A sales associate at the store says most parents are coming for board games such as Monopoly and Game of Thrones and also for drones. “Board games are always popular, and more so in these times when everyone is home,” agrees Shobhit Singh, director of Gujarat-based Stone Sapphire, a manufacturer and distributor of toys. Business, however, is less than half of what it used to be, adds the Hamleys sales associate.

The unanimous view is that to boost the domestic toy sector, the government needs to remove some hurdles and ease the path. Mehta lists some expectations: “Procurement and allotment of land, strong infrastructure such as power, water, sewage and commuting services as well as licences and easy loans for toy manufacturers. In a nutshell, the attitude towards the toy industry has to change.”



Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel