With 85 per cent toys sold in India coming from China, Hong Kong and other countries, retailers in India brace for 200 per cent import duty hike.
By Vivek Kumar M
February 24, 2020
In the union budget this year, Government of India increased import duty on toys from 20 per cent to 60 per cent. Government wants to boost local manufacturing of toys and keep a check on imports with this steep increase in custom duty. Since 2008-09 import of toys and Sports equipment in India have increased three-fold.
Retailers in Bengaluru city said that hike in customs duty would increase cost of toys by 10 to 15 per cent.
In 2008-09 India imported toys and sport equipment worth US $ 215.48 million. In 2018-19, the imports reached US $ 645.66 million. China, Taiwan, Hong Kong, Japan, Italy, Netherland, Singapore and US are the other major toy suppliers for India.
In 2019-2020 till December, total import of toys and sport equipment amounted to US $ 454.38 million. Of which US $ 327.31 million came from China.
Business Analyst Raghu Dangayach says that increase in import duty will have massive impact on prices of toys.
He says, “Considering the fact that India is a highly price sensitive market, the consumption of goods will drop drastically. Further, this step will divert consumers towards domestic products.”
Though Indian manufacturers believe that this will help increase their sales marginally, they lack facilities and hope to get incentives from the government to boost production.
Abdul, a wooden toymaker from Channapatna, says number of buyers in market has increased over the years, but the number of suppliers in India remained the same.
He says, “There is nothing like that (support for local manufacturing from government) for us. We face problems like lack of electricity and raw material procurement here. If more facilities are provided, automatically manufacturers will come and production will increase.”
Venkatesh, an official from Toyzone Impex Pvt Ltd, a toy manufacturing company in India said, “There is a lot of variety that comes in from China and that is the main reason for increasing imports over the years. Whatever new design or new products are there, they come from China. People always look for new products in the market.”
A toy trader based out of Commercial Street said, “ ‘Make in India’intiative should make sure that India has good quality manufacturing units … Problem is if you just keep saying ‘Make in India’ and not have our industries funded, then it’s not going to work.
“I think this is something that should be done over some time and not be done overnight by increasing duty on toys from China. Apart from it, the other way to go about this is to boost the toy industry in India. You should provide allowances for people to set up industries and manufacture toys. First you need to create the demand for Indian made toys and then you have the supply coming in. You can’t just cut off the supply for foreign toys and expect the demand for Indian toys to climb up.”
Raghu Dangayach further says, “Government can provide subsidy for plastic free or environment friendly toys. They can provide digital avenues to manufacturers to help them in distribution and build skills in the unorganised labour market.”