₹11,000 crore plan taking shape to make India a global toy hub

The Department for Promotion of Industry and Internal Trade (DPIIT) is working on a Rs 13,000 crore scheme aimed at transforming India into a global toy manufacturing hub, while addressing the challenges of India’s high reliance on imports and cost disadvantage compared to global behemoths in China and Vietnam.

 

The scheme, if approved by the Union Cabinet, will see targeted financial incentives for domestic manufacturing of toys as well as specified raw materials, according to people aware of the matter. Additionally, there will be a provision for concessional basic customs duty in the case of investment commitment of over Rs 500 crore, provided that conditions such as incremental investment, sales threshold, domestic value addition, and exports criteria are met, they said.

 

The initiative to come up with such a scheme came against the backdrop of finance minister Nirmala Sitharaman’s announcement in the Union Budget FY26 to build a national action plan for toys. In the past, DPIIT had proposed a production-linked incentive (PLI) scheme worth Rs 3,489 crore. However, the scheme did not see the light of the day as top government officials believed that new schemes should be rolled out after assessing the efficacy of the existing 14 PLI schemes. Till now, only a bunch of PLI schemes have delivered expected results.

 

One of the persons cited above said that the scheme is still at a discussion stage. Inter-ministerial consultation is yet to be concluded. However, the idea is to get all the required approvals and implement it at the earliest, a government official told Business Standard.

 

DPIIT did not respond to the queries sent by Business Standard.

 

INCENTIVES

 

Through specific interventions under the scheme, the government aims to position India as a key player in the global toy market, while meeting local and international demand. Apart from boosting local manufacturing, the scheme will help India’s integration into the global value chain.

 

Under the proposed scheme, the types of incentives are being planned – Turnover Linked Incentive (TLI), Localisation Linked Incentive (LLI) and Employment Linked Incentives (ELI) are being planned. Such incentives will be available for a period of five years. 

 

For instance, in the case of TLI , incentives will be disbursed to eligible beneficiaries or companies after meeting the criterion of incremental investment and sales over a base year determined by the government. In the case of LLI, incentives will be given to companies if a certain share of raw materials are manufactured in the country. Under ELI, financial assurance will be given to manufacturers, based on the new employees hired.

 

TOY INDUSTRY 

India holds a share of around 1.7 per cent of the global toy market, which was valued at nearly $114 billion in 2024. Currently, China dominates the global toy market, accounting for 58 per cent of exports. Other key manufacturing hubs include Vietnam, Germany, United States (US).

 

“Building on the National Action Plan for Toys, we will implement a scheme to make India a global hub for toys. The scheme will focus on development of clusters, skills, and a manufacturing ecosystem that will create high-quality, unique, innovative, and sustainable toys that will represent the 'Made in India' brand,” Sitharaman had said in her Budget speech in February.