‘’Indian Toy Manufacturers serve only 20% to the Indian Market while the rest are imported toys from different countries, mainly from China and Italy.’’ This is according to a report by the Department of Industrial Policy and Promotion.
Over the last three to four years, China faced labor strikes in its major factories, which resulted in depletion in its workforce. Economists say that China is trying to re-balance its economy. One of its aims is to expand the consumption and dwindle the dependence on exports. In the recent survey it has been observed that the rising demands of wages and shrinking workforce in China will ultimately benefit the toy manufacturing industry in India. This being the main reason, there is an opportunity for India as China is not encouraging more laborers.
Sujan Hajra, chief economist, co-head research at Anand Rathi Securities, said, “China does not want polluting industries and exports relating to that. If labor costs increase, then obviously in an intensive industry like toys, it won’t be able to compete and China is trying to vacate that space. It is totally right that an increase in labor costs in China could help the Indian toy industry.”
Currently, domestic business is 70% and exports are 30%, and by two years we plan to achieve the 50:50 ratio. In comparison to exports, our domestic business is currently more profitable. With regards to exports the toy industry is quite competitive. ‘’Indian Toy Manufacturers serve only 20% to the Indian Market while the rest are imported toys from different countries, mainly from China and Italy.’’ This is according to a report by the Department of Industrial Policy and Promotion. The Indian Toy Industry which largely consisted of Small and Medium Enterprises (SMEs), was caught in a strange paradox, till September 2017, it recorded the fabulous growth of double-digit over the last five years. With such growth in the Indian Toy Industry there is still 40% of the Indian Toy Industry had shuttered.
Hajra further added that we are no longer importing lower-category toys from China, but there is still some competition in higher-end toys. There is a potential for growth in the organized toy-manufacturing sector owing to cheap labor, the benefit of Chinese market restructuring, government initiative etc. It seems the manufacturing capacity of China is unlikely to stop in the future, despite their several strikes and demands to rise in their wages.