Govt efforts bring down toy imports, but no impact on exports stagnate

India’s toy imports decreased drastically to $64.9 million in FY24 from $304.1 million in 2018-19. The steepest decline was witnessed between FY20 and FY22, demonstrating the direct impact of the new regulations.

India’s exports, however, saw a modest increase to $152.34 million in the previous fiscal from $129.6 million in FY20, the report by Global Trade Research Initiative (GTRI) released on Tuesday showed.“Though India has taken decisive steps since 2020 to curb the inflow of substandard toy imports, especially from China, and strengthen the domestic toy industry, India needs to take more comprehensive approach for development of the industry,” GTRI Founder Ajay Srivastava said.

India dramatically raised the import duties on toys beginning February 2020. The basic customs duty was increased from 20% to 60% and then to 70% in July 2021. These duty hikes were accompanied by quality control orders that mandated strict standards on imported and domestically produced toys.

These standards cover various safety aspects such as the prevention of sharp edges, small parts hazards, flammability, and the migration of harmful chemicals. Toys must also carry the Bureau of Indian Standards (BIS) certification mark (ISI Mark). The enforcement of these standards includes random checks and testing of toy consignments in NABL-accredited laboratories. This has led to a sharp drop in imports of cheap Chinese toys that had earlier flooded the market.

The share of imports from China dropped from 87% ($304.1 million) of India’s total toy imports in FY19 to 64% ($41.5 million) in FY24. There was an increase in imports from other regions such as Asean countries, Sri Lanka, and the Czech Republic.

The government should support small and medium enterprises in leveraging digital marketing and promote Indian toys at international fairs to establish global connections, the GTRI report said. India’s toy industry is valued at $3 billion against $100 billion in China. 

The report also asked India to invite international toy manufacturers who operate in China, such as Hasbro, Mattel, Lego, Spin Master, and MGA Entertainment, to consider setting up production facilities in the country. This could help shift part of the global toy production market to India, the report said.

India also has to move forward in making toy parts locally, it said, as the imports of inputs are much higher than those of the finished products in the industry.