• Kovllp Consulting

INDIAN TOY INDUSTRY – A GOLD MINE for SMEs and Start-Ups

Updated: Oct 16

India’s toy industry is worth Rs 7000 to 8000 crore, which is less than 1% if the total world market for toys. Ranging from plastic, mechanical, soft/plush dolls & animals, board games, puzzles, educational games, metal and tin, wood, battery operated pullback toys etc. Indian toys are made from diverse raw materials like, plastic, wood, rubber, metal, textiles etc. Given all these materials present in abundance across the country, the toy market in India is still dominated by China. China approximately meets 85% of the total toy demand of the country.


Indian toy industry is mainly based in small and cottage sectors, with about 4000 manufacturing units comprising of micro (75%), small and medium (22%) and large (3%) units. They are mostly located in Delhi, Mumbai, and Punjab, Uttar Pradesh, Haryana, Tamil Nadu and clusters across central Indian states. 60% of the manufacturers operate with as less as 5 employees in the unorganized sector and the rest is comprised of leading global toy manufacturers. India’s share stands at an estimated $500 million of the total $90 billion global toy market which is mere 0.5%.


China secures a top spot in the global toy market with several benefits from their government on land allocation, factory setup and so on. India lately has started dwelling upon these matters with concern to encourage indigenous manufacturing units set up shops. Hike on import duty from 20% to 60% on toys, stringent enforcement for quality checks on imports, invitation for top toy manufacturers to set up units in India are few actions that government has taken to stir SMEs and Startups to notice the opportunity in the Indian toy industry. Establishment of networks like ATAL Tinkering Labs across the nation suggests the need for SMEs to form a robust supply chain in the toy industry to meet the demand of the market.


Close to 500+ MSME toy manufacturers are present in the country, of which merely 12% owns fully fledged in-house Design studio & team of trained designers for product conceptualization, prototype development and R&D on design with proper setup of CAD/CAM tools & other software. About 15% just imitates and copies the designs of other domestic manufacturers or their Chinese counterpart.


More number of MSMEs needs to be brought under one umbrella to manufacture small components for local companies which will help add more products and types of toys thus making India a potential exporter of toys. Government intervention in terms of provision of raw materials and subsidies should be able to excite the entrepreneurs looking for an opportunity. MSMEs with potential to bring in creativity and skills are given extensive support by the government under various circumstances like factory setup, land acquisition, labor reforms etc.


In conclusion, the scope of tapping into the global toy market in India is very viable considering the fact that Indian government has taken necessary steps in the encouraging SMEs into the sector. Startups are being encouraged to link the information technology expertise and toys to offer games that are beneficial in widening the imagination of child in terms of education. An amalgamation of local artisans and manufacturers, this sector possesses great untapped potential.


The MSME toys manufacturing enterprises are united in their respective regions/locations and interact & share information with each other which upon taking onto a national level can tip the scale towards the country’s gain. An adoption into the opportunities provided by E-commerce can fire up the sales numbers of SMEs pertaining to the sector both in domestic as well as international market.


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