Wide use of computer software suggested to ward off Chinese threat to toy industry
Updated: Jul 21, 2014 03:36:09pm
New Delhi, Jul 21 (KNN) Involvement of CDAC (Centre for Development of Advanced Computing), setting up of a national toys and games designing and manufacturing, support institute, helping MSMEs to procure critical raw material at reasonable prices and establishing distinct clusters are the key recommendations of the study done by NSIC to reduce the dominance of Chinese imports in the Indian toy making companies.
Electronic toys and games and Battery operated toys have a huge market in India (almost 50 per cent market share) that is currently dominated by Chinese toys, hence it is suggested that the Indian toys manufacturers should focus on the development of Electronic toys and games and battery operated toys that could be sold at cheaper costs in India, according to the study conducted to assess the impact of Chinese imports on MSMEs in toy industry and to suggest remedial measures for corrective action.
According to the study report, an R & D project could be formulated by Toys Industry Associations (TAI; TAITMA) that could be supported by the Government and technological support for design, development and manufacturing of component assembled PCB, remote control mechanism etc could be provided by IITs, CDAC, electronic products manufacturing industry etc.
“Merely 12 per cent of MSME Toys Manufacturers have their own full-fledged in house design studio and team of trained designers for product conceptualization, prototype development and R&D on design with proper setup of CAD/CAM tools and other software,” it said.
The study recommended that a National level Toys and Games Design and Manufacturing Technology support Institute could be set up at the national capital for the benefit of the industry under Government support that offers services to MSME toys manufacturers on confidential basis and at reasonable charges.
Another suggestion recommended by the study was to make easy availability of raw materials.
“Plastic raw materials (HDPE, LDPE, PP) are the prominent raw materials that are being consumed by the MSME toys manufacturers, collectively in huge quantities. It is suggested that the Toys industry associations which is TAI based at Delhi and TAITMA based at Mumbai could procure plastic raw materials directly from manufacturers such as RIL and GAIL, in bulk quantities (at least one truck load) on behalf of their interested members in order to get bulk discount, that will be highly beneficial for toys manufacturers,” it added.
At present there is an inverted/ unfavourable import duty structure for raw materials as compared to finished products in India for the toys industry that has led to flooding of domestic toys market with imported toys, particularly from China. For example the import duty on finished toys ranges between 10-15 per cent, whereas all critical raw materials for toys manufacture attract much higher import duties in the range of 29-70 per cent and this anomaly could be reviewed at Ministry Of Commerce, the study pointed out.
“Certain advanced production technologies and machines need to be adopted by the toys manufacturers in order to produce better quality products; reduce wastage of raw materials; enhance productivity Finance (Term loan and Working capital) is needed by the Indian MSME toys manufacturers to grow, modernize and expand but is quite expensive in India and if possible needs to be extended to them on softer terms like in China,” according to the report.
The study further suggested a single Window clearance system for setting up new factories by entrepreneurs; more export incentives like higher rate of duty draw back; working sheds could be provided by the Indian Government to the industry in proper industrial areas on rent at concessional rates etc.
The success of the toys manufacturing industry in China is primarily due to Cluster approach that is non-existent in India and is the need of the hour, said the study.
Clusters lead to efficient supply chain mechanism for raw materials, parts and better cost economics for suppliers as well as toys manufacturers and it is suggested that two distinct Toys industry clusters be promoted, one at Delhi and other at Mumbai which are the leading manufacturing hubs for toys and have sufficient numbers of toys manufacturers, at locations that are well connected with the two cities and easily approachable.
Even the unorganized toys manufacturing enterprises shall also shift to these clusters. These clusters can be promoted by interested toys manufacturers, their Industry Associations under support from Cluster Development Scheme of Ministry of MSME, the study added.
The global market for toys at the present level is estimated at USD 80 billion. The MSME toy manufacturers from India for toys presently constitute less than 0.08 per cent of the global market.
The world market for toys is currently dominated by China that produces toys worth USD 29 billion every year (almost 36 per cent share of total world market for toys) out of which USD 17 billion worth of toys are consumed in China itself and balance toys worth USD 12 billion per annum are exported to other parts of the world with major destinations being USA, EU etc.
It is estimated that approximately 30 per cent of the Indian toys market is served by domestic manufacturers (MSMEs and large units), with the remaining 70 per cent (approximately) being accounted by imports mainly from China (approximately 75 per cent share of total imports of toys in India), which offers wider variety of toys of inferior quality at cheaper prices and attract children of all ages. (KNN/SD)
Electronic toys and games and Battery operated toys have a huge market in India (almost 50 per cent market share) that is currently dominated by Chinese toys, hence it is suggested that the Indian toys manufacturers should focus on the development of Electronic toys and games and battery operated toys that could be sold at cheaper costs in India, according to the study conducted to assess the impact of Chinese imports on MSMEs in toy industry and to suggest remedial measures for corrective action.
According to the study report, an R & D project could be formulated by Toys Industry Associations (TAI; TAITMA) that could be supported by the Government and technological support for design, development and manufacturing of component assembled PCB, remote control mechanism etc could be provided by IITs, CDAC, electronic products manufacturing industry etc.
“Merely 12 per cent of MSME Toys Manufacturers have their own full-fledged in house design studio and team of trained designers for product conceptualization, prototype development and R&D on design with proper setup of CAD/CAM tools and other software,” it said.
The study recommended that a National level Toys and Games Design and Manufacturing Technology support Institute could be set up at the national capital for the benefit of the industry under Government support that offers services to MSME toys manufacturers on confidential basis and at reasonable charges.
Another suggestion recommended by the study was to make easy availability of raw materials.
“Plastic raw materials (HDPE, LDPE, PP) are the prominent raw materials that are being consumed by the MSME toys manufacturers, collectively in huge quantities. It is suggested that the Toys industry associations which is TAI based at Delhi and TAITMA based at Mumbai could procure plastic raw materials directly from manufacturers such as RIL and GAIL, in bulk quantities (at least one truck load) on behalf of their interested members in order to get bulk discount, that will be highly beneficial for toys manufacturers,” it added.
At present there is an inverted/ unfavourable import duty structure for raw materials as compared to finished products in India for the toys industry that has led to flooding of domestic toys market with imported toys, particularly from China. For example the import duty on finished toys ranges between 10-15 per cent, whereas all critical raw materials for toys manufacture attract much higher import duties in the range of 29-70 per cent and this anomaly could be reviewed at Ministry Of Commerce, the study pointed out.
“Certain advanced production technologies and machines need to be adopted by the toys manufacturers in order to produce better quality products; reduce wastage of raw materials; enhance productivity Finance (Term loan and Working capital) is needed by the Indian MSME toys manufacturers to grow, modernize and expand but is quite expensive in India and if possible needs to be extended to them on softer terms like in China,” according to the report.
The study further suggested a single Window clearance system for setting up new factories by entrepreneurs; more export incentives like higher rate of duty draw back; working sheds could be provided by the Indian Government to the industry in proper industrial areas on rent at concessional rates etc.
The success of the toys manufacturing industry in China is primarily due to Cluster approach that is non-existent in India and is the need of the hour, said the study.
Clusters lead to efficient supply chain mechanism for raw materials, parts and better cost economics for suppliers as well as toys manufacturers and it is suggested that two distinct Toys industry clusters be promoted, one at Delhi and other at Mumbai which are the leading manufacturing hubs for toys and have sufficient numbers of toys manufacturers, at locations that are well connected with the two cities and easily approachable.
Even the unorganized toys manufacturing enterprises shall also shift to these clusters. These clusters can be promoted by interested toys manufacturers, their Industry Associations under support from Cluster Development Scheme of Ministry of MSME, the study added.
The global market for toys at the present level is estimated at USD 80 billion. The MSME toy manufacturers from India for toys presently constitute less than 0.08 per cent of the global market.
The world market for toys is currently dominated by China that produces toys worth USD 29 billion every year (almost 36 per cent share of total world market for toys) out of which USD 17 billion worth of toys are consumed in China itself and balance toys worth USD 12 billion per annum are exported to other parts of the world with major destinations being USA, EU etc.
It is estimated that approximately 30 per cent of the Indian toys market is served by domestic manufacturers (MSMEs and large units), with the remaining 70 per cent (approximately) being accounted by imports mainly from China (approximately 75 per cent share of total imports of toys in India), which offers wider variety of toys of inferior quality at cheaper prices and attract children of all ages. (KNN/SD)
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