Indian Toy Industry Push Into The UAE Market (GS Paper 3, Economy)
Context:
- The Toy Association of India (TAI) has led a delegation to the UAE, comprising manufacturers, importers, exporters, retailers, and toy testing lab designers, signaling a strategic move to expand the Indian toy industry's presence in international markets.
Indian Toy Industry:
- India's toy exports have surged by 60% from $203.46 Mn in 2018-19 to $325.72 Mn in fiscal year 2022-23, while toy imports have declined by 57% during the same period.
- The industry is projected to reach $3 Bn by 2028, growing at a CAGR of 12% between 2022-28.
Potentials for Toy Industry:
- India possesses several advantages for toy manufacturing, including access to raw materials like polyester and plastics, competitive labor costs, increased import duty protection, and 100% FDI allowed under the Automatic Route.
Associated Challenges:
- Despite growth prospects, the Indian toy industry faces challenges such as limited brand awareness, a fragmented industry structure dominated by SMEs, stiff competition from global players, regulatory compliance issues, and high production costs for small manufacturers.
Government Initiatives:
- The Government of India has launched initiatives like the National Action Plan for Toys (NAPT), increased import duty on toys to 70%, established toy clusters to foster industry growth, implemented Quality Control Orders (QCO) on toys, and provided customized state incentives to support toy manufacturers.
Way Ahead:
- India's recent Free Trade Agreements with regions like the UAE and the Middle East offer zero-duty market access for Indian-made toys, presenting significant opportunities for expansion.
- Strengthening industry associations and promoting collaboration among stakeholders are also essential for the sector's growth and competitiveness.
- Expanding into international markets like the UAE is a strategic move for the Indian toy industry, leveraging its strengths while addressing challenges through government support and industry collaboration.
- With the right strategies and initiatives, India can further establish itself as a key player in the global toy market.
