Global Economy

Support for toy manufacturing to continue through import duty and QCO measures



The centre is not considering any new Performance Linked Incentive (PLI) schemes but will continue supporting toy manufacturing in the country through import duties and quality control orders. Addressing journalists in New Delhi, Secretary, Department for Promotion of Industry and Internal Trade (DPIIT), Rajesh Kumar Singh said the proposal of having a PLI scheme on toys has been put on hold and a third-party audit of the white goods PLI will be conducted.

Responding to a query on the decision to put the toy PLI proposal on hold, he said, “Currently we are focused on getting these 14 PLI schemes up and running in a good way. For the time being, the new PLI schemes are not being considered and we will focus on ensuring that these existing schemes get implemented well. Thereafter we’ll see.”

The centre is running PLI programmes worth Rs 1.97 lakh crore for 14 sectors where India aims for self-reliance. These sectors include Mobile Manufacturing and Specified Electronic Components, Critical Key Starting Materials, Drug Intermediaries and Active Pharmaceutical Ingredients, Speciality Steel, and Automobiles and Auto Components among others.

Commenting on the third-party audit of the white goods PLI scheme, a senior government official said, “The Arun Jaitley National Institute of Financial Management will conduct the audit. They will be looking at the PLI scheme from all angles to assess whether the stated objective has been achieved. We want to understand if there is a need for course correction.”

Instead of more such schemes, the focus has now shifted to non-PLI measures which have also borne fruit. An official statement said that Indian toy industry reported a 52% decline in imports and 239% rise in exports in fiscal 2022-23 compared with fiscal 2014-15.

This is an outcome of measures such as the higher customs and import duties. Basic Customs Duty (BCD) on toys was increased from 20% to 60% in February 2020, and subsequently to 70% in March 2023. Another step that boosted domestic industry is the mandatory sample testing of each import consignment to curb the proliferation of sub-standards toys, an official statement said. A Quality Control Order (QCO) for Toys was also issued in 2020 and enforced from January 1, 2021.These observations have been highlighted in a Case Study by the Indian Institute of Management (IIM) Lucknow. This report notes that the number of toy manufacturing units in the country have doubled from 2014 to 2020.Commenting on the strategy behind import duties, Singh said that a minimal level of protection must be given to local industry for ensuring they do not face cost disabilities. But this support cannot continue for eternity. “Basic customs duty will have to come down eventually. We cannot continue with infant industry argument forever,” he said while adding that the government can support the domestic industry even without budgetary support.



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