New incentive scheme for toy manufacturing soon

financialexpress.com:

The government is considering launching an incentive scheme to boost domestic manufacturing of toys, keeping in view the high employment potential of the sector. This follows a series of steps taken over recent months to support the industry, including hike in import tariffs to curb inflow of cheaper products from abroad, and tightened quality norms for imports.

“One major policy intervention that we have been pursuing for some time and still is serious about (is to promote local production of toys). We (will) bring about further incentives which could kick-start this emerging and dynamic part of our overall manufacturing ecosystem,” secretary in the department for promotion of industry and internal trade Rajesh Kumar Singh said on Wednesday .

The secretary wasn’t categorical about inclusion of toy manufacturing in the Rs 1.97 trillion Production Linked Incentive (PLI) scheme, but sources said the ministry of commerce and industry has worked out a scheme. An outlay of Rs 3489 crore has been proposed for the scheme that will run from 2024-25 to 2031-32.

This year’s interim budget provided a token amount for PLI for toys but details will be spelt out when cabinet approval is in place.

After the tariffs were increased and Quality Control Orders (QCOs) were put in place India’s toy imports decreased drastically to $ 64.9 million last financial year from $304.1 million in 2018-19. India’s exports, however, increased modestly to $ 152.34 million last financial year from $ 129.6 million in FY 20.

India dramatically raised import duties on toys beginning in February 2020. The basic customs duty was increased from 20% to 60% and then to 70% in July 2021.

The share of imports from China dropped from 87% ($ 304.1 million) of