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Last updated: 28 Sep, 2020  

Toy.Thmb.jpg Non-tariff barriers on toy imports likely early next year

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SME Times News Bureau | 28 Sep, 2020
In line with its ambitious plan to make India a toy hub and self-reliant in the segment, the Union government is likely to go a step forward and impose further non-tariff barriers on toy imports.

Official sources told IANS that the licence regime for toy imports may start in a phased manner, starting March next year or early FY22. This will be a follow up of quality control order issued for the industry recently.

The first priority for the government in its bid to make India "Aatmanirbhar" or self reliant in the toy sector, however, is to make the domestic industry achieve high quality standards, people in the know said.

So, although further non-tariff barriers are on the anvil, the Centre does not want to rush in before the quality control order of the government comes into effect in January and the industry is well in compliance with the norms. Earlier this month, the timeline was extended for the domestic toy manufacturers to comply with the new standards till January 1.

In a recent meeting, Union Commerce Minister Piyush Goyal took stock of developments on this front along with the required action plan for the future, sources said.

The ministry has identified toys among several categories of non-essential imports, where restrictions could be considered. In recent months, the Commerce Ministry has resorted to the use of import restrictions instead of free imports to boost domestic manufacturing.

In December, the government raised the import duty on toys by 200 per cent to 60 per cent from earlier 20 per cent. This, however, had limited impact on putting a check on unrestricted imports. India has been importing toys of an average value of about $285 million for last three years. But total imports in the category including electronic parts, is to the tune of over $650 million.

Noting that the global toy industry is worth over Rs 7 lakh crore but that India's share is very small in the sector, Prime Minister Narendra Modi, in his monthly radio broadcast 'Mann Ki Baat' last month gave a clarion call to be "vocal for local toys", stressing on the need for making the country a toy hub.

The Prime Minister said that the toy industry is very diverse and some of the regions in India are being developed as toy clusters to make the nation a toy hub.

This is a fresh push for the industry after Modi in one of his addresses to the nation during the nationwide lockdown stressed on 'Aatmanirbhar Bharat' or a self reliant India and asked Indians to be 'vocal for local' products.

Industry players, although hailing the view of boosting the domestic toy industry, are of the view that curbing imports would severely impact the market as the domestic players only supply around 15 per cent of the total demand in the country.

They have time and again called for government support to augment production capacity.

The government, however, plans to expand the scope of the production-linked incentive (PLI) to toys along with other sectors to garner investments in the segment, which if successful will boost the manufacturing capacity in the country.

The global toy industry size is estimated at $100 billion and India has a market size of $1.75 billion in 2019, including both formal and informal sectors. India reported a 15.9 per cent growth rate from 2011 to 2018.

Among other issues facing the sector, the manufacturers lack technical expertise and capability for manufacturing electronic toys, although there is availability of raw material for local manufacturing.
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