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How India Cut Back On Its Dependence On China For Toys
The Indian toy industry has risen to the challenge and performed well.
Sustained government action over the last few years has brought down India's import of Chinese toys by almost 50 per cent.
The Chinese toy industry overwhelmingly dominates the global toy market.
China accounts for around 75 per cent of the toy supply globally.
Chenghai district accounts for almost 30 per cent of the global toys produced.
Even high-end toy manufacturers depend on China.
The Mattel Group, known for manufacturing toys such as Barbie and Hot Wheels, produces around 74 per cent of its products in China.
Indian overdependence on Chinese toys can be attributed to India's young demographic, where over 25 per cent of the population is under 14 years of age.
So, around 80 per cent of toys in India are imported.
China alone accounts for 70 per cent of India’s toy imports.
China's edge: Massive state support has made the Chinese toy industry as large as it is today.
Government policies, such as subsidies, incentive schemes, and quick and low-cost loans to businesses, have greatly propelled the toy industry.
As a result, the industry grew rapidly as manufacturers continued establishing new manufacturing plants.
Not all fun and games: Chinese toys have a reputation for being low-cost and low-quality.
Due to lack of standards and regulations, Chinese industries, including the toy one, have focused on manufacturing cheap goods.
As children often chew on their toys, such products were negatively impacting children's health.
Noting the harmful impacts, US Customs in October 2021 seized a consignment of Chinese toys that contained high levels of lead, barium, and cadmium.
India also implemented a ban on Chinese plastic toys for half a year in 2009 on similar grounds.
India's pushback against Chinese domination of its toy market was due to various factors, like the toxicity of Chinese toys, China's actions along the LAC, and promotion of India's budding toy industry.
India imposed the 'Toys Quality Control Order', whereby toys sold in India for kids less than 14 years of age are required to have an ISI mark to approve of the toys’ quality.
During Covid-19, Chinese manufacturers couldn’t get their plants certified, while Indian manufacturers got certified more quickly.
India increased import duty on toys from 20 per cent to 60 per cent. Since China is covered under the Asia Pacific Trade agreement, the actual duty for China turned out to be around 34 per cent — still higher than 20 per cent.
The impact of government actions is already visible with Indian manufacturers reporting a rise in revenues.
Further, India’s first toy cluster established recently by Aequs Private Limited began production at its first unit, with others to follow.
Issues remain: Indian toy manufacturers do not specialise in higher-end toys such as electronic toys, while China has a strong electronics industry that aids quick and cheap manufacturing.
Indian toy manufacturers have cited high duty on the import of machines from countries like Korea and Japan as the reason for the low-production capacity of electronic toys.
Furthermore, the absence of large manufacturers prevents Indian toy manufacturing from scaling to Chinese levels.
Despite the issues, the Indian toy industry has performed very well by rising to the challenge and reducing India's dependence on China.
