From Plaything to Powerhouse: The History, Current State and Future of India’s Toy Exports
- Contributor - Pravash
- 5 min read
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India’s toy industry has transformed from a net importer to a net exporter, with projected growth driven by policy changes and a focus on local manufacturing.
Highlights
- 🌏 In 2023-24, India’s toy exports surpassed imports for the first time.
- 📈 The domestic industry has a projected growth rate of 4.5% annually until 2025.
- 🧸 Over 1,000 toy manufacturers now active in India.
- 🚧 Increased import duties from 20% to 70% to protect local industry.
- 🇨🇳 Chinese competition remains a significant challenge.
- 🎨 New manufacturers are innovating with local materials.
- 🤔 Sustained Future growth depends on talent and investment.
For as long as humans have been around, we’ve had a penchant for playthings. From the crudely carved wooden figures of antiquity to the hyper-realistic, battery-powered marvels of today, toys have been more than mere amusements; they’ve been reflections of societies, economies, and cultural shifts. India’s toy industry is currently undergoing a transformation that is as captivating as any child’s favourite story.
Until a decade ago, India was largely a spectator in the global toy market. Flooded with inexpensive, mass-produced toys from China, domestic manufacturers struggled to compete. In the 2011-12 financial year, India imported toys worth millions of dollars, while exports were a mere fraction of that. Fast forward to 2023, and the narrative has flipped. India’s toy exports surpassed imports for the first time, clocking in at $522.2 million versus $517.7 million. This is a staggering turnaround. How did this happen?
The toy industry is a behemoth, valued at around $108 billion globally. Dominated by giants like Lego and Japan’s Bandai Namco, it’s a fiercely competitive space. According to a recent report from the USA Hub and MGA Entertainment, despite having a huge population of kids and young adults, India is neither a significant consumer nor exporter of Toys. Right now, despite the recent growth, India holds just a 0.5% share of the toy export market. China, on the other hand, exported a whopping $104 billion worth of toys in 2022.
Shifting Preference: According to the Toy Association report in 2018, 67% parents believe in STEM-focussed toys as their primary way to encourage science and maths development in young children. Shifting preference from conventional toys towards modern and hi-tech electronic toys is strengthening the market growth.
Yet, the tide is turning. India’s toy market is projected to nearly triple in size over the next decade, from $1.7 billion in 2023 to $4.4 billion by 2032. As trade tensions between the U.S. and China escalated, businesses began seeking alternatives. India, with its large manufacturing base and growing economy, presented an attractive option. The Indian government seized this opportunity by introducing a series of measures to boost the domestic toy industry. Import duties on toys were hiked from 20% to a steep 70%, and stringent quality control standards were implemented. Any toy that comes in has to have the BIS (Bureau of Indian Standards) or ISI (Indian Standards Institute) mark to be imported here.
“India needs to make separate strategies for each group of toys such as educational toys (world trade is about USD 6 billion); construction toys like LEGO (USD 10 billion); action figures and dolls (USD 10 billion); electronic toys (USD 15 billion); board games and puzzles (USD 9 billion); outdoor and sports toys (USD 5 billion); and plush toys like stuffed animals (world trade is about USD 7 billion)”
-Ajay Srivastava, Founder, The Global Trade Research Initiative (GTRI)
So, the current and future growth spurt should be largely attributed to two key factors: geopolitical shifts and government intervention. But we, and other experts, have a different take on this.
The need for Design, Proprietary IP and Investment in Marketing
These policies, while protectionist in nature, have undeniably spurred domestic production. There’s a burgeoning toy manufacturing ecosystem in India today, with over 1,000 manufacturers emerging in recent years, many of them new. The question is: can this rapid growth be sustained?
Dr. Naveen Joseph Thomas of the Jindal School Of Government and Public Policy has cautioned that protectionism alone is not a recipe for long-term success. Productivity, innovation, and investment are crucial for any industry to thrive. India needs to move beyond being a low-cost manufacturing hub and establish itself as a global leader in toy design and technology.
“Even today in categories where 75-90% of parts production and assembly happens in India, the balance of crucial chips and motors, and even some plastics, that go into these products are all sourced from China. Without those key components, the whole piece is useless.” – says an established manufacturer.
This is why we have invested in our Consumer Toys Design To Manufacture Practice. Our Focus is to increase the GDP of Toys in India, with custom design to manufacture education, electronic, action figures, construction, and outdoor and sports toys.
The journey ahead is fraught with challenges. Intense competition from China, reliance on imported components, and the need to develop a skilled workforce are just a few hurdles to overcome. Yet, the potential rewards are immense. If India can successfully navigate these challenges, it could become a major player in the global toy industry. Bang Design can help.
Experts have identified several challenges facing India’s toy industry:
Fragmentation: The industry is highly fragmented, with around 90% of the market being unorganized. This fragmentation results in a lack of innovation and insufficient resources for investment in design, development, technology and equipment.
Quality Certification: The introduction of mandatory quality certification has posed difficulties for traditional craftsmen who may not have the financial means to obtain these certifications. This requirement can hinder their ability to compete effectively in the market.
High Import Dependency: Indian manufacturers often rely on imported raw materials, particularly from countries like South Korea and Japan, which affects production costs and supply chain stability.
Labour Skills: The need for different skill sets for various toys makes mechanization challenging, and existing laws limit the ability to adjust workforce size based on demand fluctuations.
Competition from Imports: The presence of low-cost imports, particularly from China, poses a significant threat to local manufacturers. These imports often offer cheaper alternatives that can undermine the sales of domestically produced toys.
The transformation of India’s toy sector is a microcosm of the nation’s broader economic ambitions. It’s a story of resilience, government intervention, and the entrepreneurial spirit. As the narrative unfolds, the world will be watching to see if India can successfully convert its plaything into a powerhouse. Bang Design is ready.
Key Insights
- 📊 Market Turnaround: India’s toy exports reached $522.2 million, indicating a significant shift in the industry landscape towards local production. This change highlights the importance of supporting domestic industries against global competitors.
- 🚀 Growth Potential: With an expected market growth from $1.7 billion to $4.4 billion by 2032, the Indian toy industry is poised for a substantial transformation, showcasing the potential for emerging markets in the global economy.
- 🏗️ Government Policy Impact: The introduction of stricter quality control measures and increased tariffs has reshaped the industry, emphasizing the role of government intervention in fostering local manufacturing and competitiveness.
- ⚙️ Innovation Challenges: Despite growth, reliance on imported components, particularly from China, poses a threat to sustainability. Local manufacturers must innovate to reduce this dependency for long-term success.
- 💡 Ecosystem Development: The need for a supportive ecosystem is crucial. Training for workers and investment in local sourcing and manufacturing capabilities will be vital for nurturing the industry.
- 🔍 Sustainable Growth Concerns: The current boom is seen as a reaction to protectionist policies, raising questions about the long-term viability of the industry without foundational investments in productivity and innovation.
- 🌟 Future Prospects: The toy industry’s evolution reflects broader ambitions for India’s manufacturing sector. Success hinges on overcoming competition and leveraging local strengths to thrive in a global market.
PostScript: Who are India’s biggest toy exporters?
- Aequs - is an ODM/ OEM/ Contract Manufacturer for Global brands in Consumer products like Toys and Domestic Appliances. It is now setting up India’s first Toy Manufacturing Cluster.
- Khanna Toys Corporation - produces push-n-go, roly-poly, ride-on toys, and kitchen set toys.
- GN Enterprises/; Manufacturers and suppliers of FRP and fabrication based Outdoor Playground Equipment.
- Funskool (India): was created when Hasbro Inc fell under a joint venture with MRF Ltd in 1987 to become one of India's leading toy companies. It has annual revenue of over $35 million. Focus products are Stationery, Electronic learning toys, Art & craft activity kits, Construction/assembly kits, Soft toys, Preschool Games and more.
- Natkhat: has been providing stuffed toy products for over two decades. Core products include Stuffed amusement and animal toys, Teddy bears, and other similar items made from cotton fabric
- Shaily: with an outstanding record for quality, safety and reliability, the company manufactures a range of plastic and plastic/electronic children's toys for global markets.
- Gur Toy: specializes in producing a wide range of high-quality toys, focusing on innovative designs that cater to children's developmental needs.
- Raj Toy World: is known for its extensive variety of toys, emphasizing safety and educational value in its product offerings.
- Rapidx Solutions: is a versatile manufacturer that combines technology with creativity to produce engaging and interactive toys for children.
- Aditi Toys: established in 2015, is recognized for its handcrafted toys that prioritize safety and durability, making them a favorite among parents and caregivers.
- AWALS CREATIONS: focuses on creating unique and imaginative toys, aiming to inspire creativity and playfulness in children.
- Microplastics: is a leading contract injection moulder and toy manufacturer with a vast production capacity, known for its high-quality plastic toys that are distributed globally.
- Puva Marketing: is dedicated to producing affordable and diverse toy options, catering to various age groups and preferences.
- Tara Sales: is recognized for its commitment to quality and innovation, offering a wide range of toys designed to engage and educate children.
- MSK: is a prominent player in the toy industry, known for its creative designs and focus on developing toys that promote learning through play.
- Toyzone - has more than 20 years of experience selling toys. Focus areas are Baby Furniture, Board Games, Dolls, Kitchen Sets, Magic Cars and more.
- Tripple Ess Toys Private Limited - is an established toy manufacturer with its own 40,000 square feet production area. They specialise in Clay, Wooden, Preschool, Musical, Wind up and Outdoor Toys.
FAQs
While the intended audience for these toys is children 12 years old or younger (48 percent), 30 percent of adults purchase them for other people, and almost four in ten (38 percent) buy them for themselves.
The report on India’s toys industry from IMARC reveals some interesting data on the industry. The market size for toys in India was $1.75 billion last year and is expected to grow at a clip of 15% for this upcoming year and another 12 years after that, reaching $3.3 billion by 2031!
The toys industry in India is lucrative. It offers different opportunities to startups and established businesses. A toy makes education not only fun but enjoyable for the children. The increased numbers of playschools have added fuel to this ever-growing industry.
