Toy industry’s Make in India moment
NCR has over 100 small and medium enterprises making toys. Most of these enterprises, which were struggling to survive until a couple of years ago, are now on an expansion drive, and they attribute the turnaround in their fortunes to a slew of government interventions in the past couple of years
Until two years ago, Jitender Singh was one of Delhi’s biggest toy traders in Sadar Bazar, who imported goods worth ₹2 crore a month from China.
In January this year, he set up his own toy manufacturing unit in Kundli in Sonepat. Spread over 35,000 sq ft across four floors, the factory has a range of machines, including high-capacity injection moulders. It is late afternoon, and over 150 men and women are working at the assembly lines.
“The government’s policies in the past couple of years have ensured that it is much easier to be a manufacturer than an importer of toys. Earlier 95% of toys in my shop in Sadar Bazar were Chinese; now 100% of them are made here in my own factory, ” says Singh, sitting inside his factory, which he runs with his daughters Muskan, and Jasmita Chug.
“ In 8 months, we are already making about 50 different kinds of toys. In the next few weeks, we intend to make over 100 varieties of toys,” says Muskan, 22, showing a range of toys, including radio-operated cars, educational keyboards, and prancing frogs, produced under the brand name Gooyo. Every toy has Made in India engraved on it, and their packaging has the Make-in-India lion symbol.
Singh is not the only toy importer who has turned manufacturer in the past couple of years. India’s toy industry, which was almost decimated by Chinese imports in the past two decades, is showing signs of revival in the aftermath of the pandemic. Toy factories in the National Capital Region, some of them recently started by importers such as Chug in areas such as Narela, Bawana, Kirti Nagar, Noida and Sahibabad, are busy like never before, with orders far exceeding their capacities.
NCR has over 100 small and medium enterprises making toys. Most of these enterprises, which were struggling to survive until a couple of years ago, are now on an expansion drive, and they attribute the turnaround in their fortunes to a slew of government interventions in the past couple of years such as a hike in basic Customs duty from 20% to 60%, and bringing toys under Bureau of Indian Standards (BIS) certification, among others.
In 2018-19, India’s toy import was worth $ 371 million, which drastically came down to $110 million in 2021-22 in the aftermath of the pandemic, a fall of over 70.35%, the commerce ministry said in a statement last week.
Sabarjeet Singh, who runs Centy Toys, a firm that makes pullback toy models of over 100 Indian transport vehicles, including auto-rickshaws, buses, cars and trains, among others, says his sales have increased over four times in the past three years.
“Three years back, it was around ₹7 crore a year, and we are about to touch almost ₹30 crore this year,” says Singh. The firm’s office in Kirti Nagar industrial area looks like a little transport museum. “We have recently started exporting to Australia.”
Singh has ramped up his manufacturing capacities several times in the past two years, setting up three new manufacturing units in Bawana industrial area in Delhi and increasing his manpower from 100 to 300. The factory also has an in-house lab, with equipment for sharp edge test, drop test, torque test, and accessibility probes, to conduct toy testing in accordance with the government’s new BIS guidelines.
“The government’s decision to make BIS certification compulsory for all manufacturers, including foreign ones, has emerged as a big trade barrier for Chinese toys in India, helping Indian toy makers a great deal, ” says Singh.
On February 25, 2020, the Union government issued a Toys (Quality Control) Order, bringing toys under compulsory BIS certification with effect from January 1, 2021. Under the BIS product certification, only those foreign manufacturers whose manufacturing and testing capability has been assessed as satisfactory by BIS can obtain a BIS license and export toys to India.
“The country aims to be a major producer as well as exporter of toys because of its huge potential for capturing markets as well as for employment. To realise this, the government has made a series of interventions,” a commerce ministry official said requesting anonymity. According to the official, these interventions include publication of 10 standards by the Bureau of Indian Standards, out of which seven are the part of its quality control order on safety of toys that came into effect Jan 1 2021. Other interventions include mandatory sample testing of each export consignment as per requirements of the directorate general of foreign trade.
“This has created such a huge demand for ISI-marked toys. Until a couple of years ago, Indian toy manufacturers used to go to the traders and plead with them to sell their toys,” says Naresh Kumar Gautam, vice president, Toy Association of India, and the founder of Little Genius Toys, one of India’s biggest wooden toy companies, with a manufacturing unit in Toy City in Greater Noida.
“Today, traders come to manufacturers, who are unable to meet the rising demand from traders and toy brands. Today, almost all manufacturers in the organised sector are booked for at least three months. The change can also be gauged from the fact that in annual Toy Biz International, a global B2B toy show organized by our association in 2019, 93 of 113 exhibitors were foreign companies, but this year at the show, which ended on July 5, almost all 93 stalls were put by Indian toy companies,” Gautam says.
For the last two years, Gautam has been busy expanding his manufacturing capacity, and last week added a new 14,000 sq ft floor to his factory, which is now 51,000 sq ft spread across four floors. “Every toy-maker is an expansion mode, and those who had shut their factories in the past two decades are reviving them. About 137 toy makers have bought land in the upcoming Toy Park along the Yamuna Expressway,” he says. Manufactures say that the pandemic , which led to global supply chain disruptions, prompted the union government to reboot its Make in India initiative, with a special focus on the toy sector. “The PM’s continuous emphasis on local manufacturing of toys in the past two years was a great morale booster for us,” says Gautam.
Sunny Singh, an importer of toys in Sadar Bazar who started manufacturing two years ago, is currently looking for space to start another factory. But for him it has been a tough transition from being an importer to a manufacturer of toys.
“The new BIS rules for toys left importers like us no option but to get into manufacturing, ” he says. “While I had been importing for many years, I knew next to nothing about manufacturing. And with so many compliances, I still find that running a factory is so much more difficult than importing,” says Sunny Singh, who runs Awals Creations, earlier the name of his toy trading enterprise in Sadar Bazar, but now also the name of his manufacturing unit in Naraina industrial area in Delhi, where he also does contract manufacturing for other toy makers.
Traders in Sadar Bazar, Delhi’s wholesale toy hub, say Indian manufacturers currently do not yet have the capacity to meet the demand. Balkrishan, a toy dealer in the market, says that in the past two years, he has had to switch from selling made-in-China to made-in-India toys.
“Because even foreign manufacturing units need BIS certification, toy import is almost impossible as of now. Unlike in 2020, when 95% of the toys in my shop were imported, now almost 100% are made in India, and quite a significant part of them are made in the factories of Noida and Bawana in Delhi. But my business is down by 60% as there is not enough supply of toys from Indian manufacturers,” says Balkrishan, who has a toy shop in Sadar Bazar. “ Besides, very few manufacturers can match the quality of imported toys. They need to up their game fast.”
Deepak Vats, one of India’s biggest pichakari (water guns used on Holi) makers in Delhi’s Narela, says that there is a need for research and development in the toy sector in the country. Starting with a water gun, in the past two years, he has switched to making over 40 different kinds of toys, including, stacks, wheels, ring catchers, six-pin bowling sets, baby swings, and magic way, among others.
Vats , a mechanical l engineer, is among the very few toys’ makers in Delhi who make their own moulds. The process of making toys, Vats explains, starts with creating moulds in the tool room, which has a Computerized Numerical Control (CNC) Machine Centre, and several manual lathe, drilling, and milling machines.
The mould is then taken to the injection moulding and blow moulding machines. Plastic granules are fed into these machines to be melted. The hot molten plastic is shot by the machine into the mould’s cavities. Then it cools, hardens, and now a solid object—a part of the toy –is ejected.
“It is the quality of the mould, the quality of the plastic granules and machining that determine how fine a toy is. Most toys in India are made by small and medium scale industries,” says Vats. “ The government must bring together engineering institutes and MSMEs in the toy sector on a common platform for the development of special-purpose machines to increase productivity and quality of toys. Besides, we need to be self-sufficient in producing electronic chips and motors for toys, which continue to be imported from China.”
In the meanwhile, Jitender Singh is already looking for 10 acres of land around Sonepat, Haryana, to set up a large factory. “ I am determined to match China’s economics of scale in toys.”