The Toy Story: India’s First Toy Manufacturing Cluster All Set To Woo Investors To Karnataka

“India has the talent and the ability to become a toy hub,” said Prime Minister Narendra Modi in the 68th edition of his monthly radio programme Mann Ki Baat. Of the many stakeholders that responded to this call of the Prime Minister was Karnataka Chief Minister B S Yediyurappa, who tweeted in response about a toy cluster in Karnataka.

Koppala in Karnataka, which will have India’s first toy manufacturing cluster, will be spread over 400 acres and generate 40,000 jobs in five years.

The PM retweeted in response:

This town, which is also home to the famous Kinhala toys, is all gearing to host the country’s first-of-its-kind cluster dedicated to manufacturing toys. Envisaged under the Product Specific Industrial Cluster Development Programme of government of Karnataka, this will be the first cluster in India dedicated for manufacturing toys.

According to the Department of Industry and Commerce, government of Karnataka, the cluster will include raw material suppliers, shared infrastructure such as plug and play industrial sheds, CETP, research and development, design and prototyping, testing, training, quality certification, customs, ancillary industries and service providers etc.

A complete end-to-end ecosystem specific to the requirements of the toy industry is being planned to encourage toy manufacturers, suppliers and service providers to set up their units at the toy cluster in Koppala. A global investors virtual meeting in August saw various global toymakers in attendance.

According to sources in the Department of Industry and Commerce, “the upcoming toy cluster at Koppal will help in getting access to finance and modern technology for large scale production of these traditional toys and help increase the popularity of the treasured art form of this region”.

The foundation for this had been laid as the Karnataka-based aerospace manufacturing specialist Aequs Aerospace pioneered the efforts two years ago to create a toy manufacturing unit at Koppala where it had also set up India's first Special Economic Zone (SEZ) for aerospace manufacturing.

But with the announcement of this cluster by the government, investors can set up their manufacturing facility in the plug and play sheds being built by Aequs SEZ or at the KSSIDC Industrial Estate or in any private land bought on their own.

The geographical proximity of these entities will help in improving the supply chain efficiency and profitability of the units operating out of this cluster, which is looking forward to manufacturing wooden and traditional toys, mechanised toys, educational and building toys, dolls, baby and infant toys, games and puzzles etc.

The skilled traditional artisans who made Kinhala toys that the town is known for can also be inducted into the manufacturing of wooden and traditional toys.

The government will facilitate new investors who wish to set up their units, while Aequs, which is the anchor investor in the cluster, will be creating the required infrastructure for setting up the manufactured units – that includes a SEZ and a domestic tariff area.

Aequs is also setting up a large toy manufacturing unit which will provide an entire ecosystem for toy manufacturing which can facilitate development of ancillary and support services in the area. The unit will be set up at a capital investment of Rs 1,500 crore and aims at creating over 20,000 jobs over the next five years.

While the labour intensive industry looks at providing employment to “40,000 people over the next five years” as the Chief Minister tweeted, this effort is being also seen as providing impetus to women empowerment through employment.

According to the department, the Koppala toy cluster “will not just create new employment opportunities in the region but will also aid the development of local entrepreneurship, women empowerment and overall economic development of the region”.

And to address the key question of raw material supply to this cluster, especially given that China is a key supplier in this sector, the government says that while getting basic raw materials like polymers, wood, fabric and paint would not pose a problem as entry of new vendors would only make them available at much more affordable rates, there would be challenges to provide for specialised and customised ancillary components.

For this, as per the Department of Industry and Commerce, “the Government is considering capacity development program whereby efforts will be made to connect the potential MSMEs with the leading players, for technological enhancement, skill upgradation and knowledge sharing”.

And from the point of view of the industry, the cluster is being seen as “a key milestone in import substitution and manufacturing of quality toys in India,” as currently 85-90 per cent of the domestic toy requirement is met through imports.

As per Aequs Infra, the cluster is being positioned as the premium sourcing destination for global toy brands, and is expected to be operational by third quarter of 2020.

Karnataka is looking to finally up its game in terms of wooing investors to the state, especially to pockets like these, by tapping the sheer scale of the toy manufacturing ecosystem and the opportunities connected to it.

Hopefully, the Chennapattana toys from Ramanagara too will get the much needed impetus to growth, especially as the ‘Toy Village’ has been destroyed by the onslaught of the Chinese toys in the last decade.