Delhi: On August 30, Prime Minister Narendra Modi, in his radio programme Mann Ki Baat, asked Indian entrepreneurs to use India’s rich heritage and culture and help it emerge as a toy hub. While this is part of the overarching “vocal for local” initiative, experts speculate that India’s production is not enough to meet the supply.

It is estimated that the Indian toy market is worth Rs 25,000 crore. Chinese-made items account for 65% of the share while Indian manufactured products make up 30% of the market. The rest comprises imports from Germany, Japan and Thailand, Praveen Khandelwal, president of Confederation Of All India Traders, was quoted as saying in the media.

In Delhi’s Sadar Bazaar, one of the largest wholesale markets in India, the traders say that their sales are already down owing to the coronavirus pandemic and the PM’s announcement has come as a shock to them.

A shop owner Rafique Ahmed stated that high rents and the lockdown affected his earnings severely. He mentioned that Indian toy manufacturers don’t have the equipment to produce high quantities to meet the demand. He highlighted that people prefer buying Chinese toys as they are cheaper yet better. 

Voicing similar concerns, another shopkeeper in the market, Ashish, who gave only his first name, stated that there are only a handful of Indian toy manufacturers. He said even if there is an influx of equipment, there will still be a shortage of manpower and raw material. He said that India doesn’t manufacture the special types of batteries used in toys; and when it comes to battery-operated toys, Indian products can’t come close to Chinese standards.

The price of Chinese toys also give them a huge advantage in the market, stated Ashok Gupta, who has been running a toy store in Sadar Bazaar for over 15 years.

GST's role

In February, toy retailers had protested the Centre’s move of raising the import duty on toys by 200%.Then on August 21, the Union Minister of Consumer Affairs, Food and Public Distribution Ram Vilas Paswan announced that imported toys will be allowed in the country only if they comply with the Toys (Quality Control) Order 2020. 

However, some feel that this would provide a much-needed boost to the industry. Sunil Nanda, owner of Noida-based Triple Ess Toys, stated that it would provide a boost to the market and increase sales. “The government imposed direct tariffs [hike in import duty] and indirect tariff [quality test] on foreign toys.

Now we are in a race with the Chinesewhere we have to cover less distance than them,” he added.

Om Narayan Dwivedi, who only sells Indian manufactured toys in Sadar Bazaar, thinks differently. “Indian manufacturers are dealing with numerous local problems like corruption, electricity issues and labour registration. These things make it difficult for them to earn profits. So, they compromise with quality to gain profits,” he told 101Reporters. 

He added that the GST impacted their business significantly. Toys like tricycles, scooters and pedals attract 12% GST, while battery-operated toys attract 18% GST and video games 28% GST, while earlier, the tax was only 5.5%. 

Despite repeated attempts by the reporter, we were unable to get a reply from the All India Toys Association and United Toys Association.