India set to gain as US raises toy import duties on China, Vietnam

New Delhi, Apr 7: The Indian toy industry is poised to capitalise on recent tariff hikes imposed by the United States on major exporting countries like China and Vietnam. Indian exporters have already begun ramping up production and exploring joint ventures with global firms to tap into emerging opportunities, industry representatives said on Sunday.

India appears to be emerging as a key beneficiary of the U.S. move to raise import duties. While India faces a 26% import tariff, competitor countries like Vietnam are hit with a 46% duty, Bangladesh 37%, China 54%, Indonesia 32%, and Thailand 36%. This positions Indian manufacturers to better absorb the tariff impact compared to their rivals.

"Huge opportunities are there for our exporters now. Vietnam's exports are about USD 6 billion, and China's are USD 80 billion. Now their items will face higher duties in the US than Indian toys. All big toy firms are exploring opportunities to set up plants in India," the CEO of Playgro Toys India, Manu Gupta, said.

India's toy exports have been hovering in the range of USD 326 million to USD 348 million for the last three years, according to the industry.

Gupta emphasised that an early conclusion of a bilateral trade agreement with the U.S. would further enhance export potential.

Gupta said that along with the Centre, now states too are making sector-specific policies to attract investments.

"States like Madhya Pradesh, Karnataka, Odisha, Haryana and Bihar are coming forward with their policies for us," he said, adding top wooden and soft toy global firms are joining hands with domestic players for manufacturing.

Amitabh Kharbanda, promoter of the Sunlord Group, echoed similar sentiments. He highlighted the central government's proposed National Action Plan for Toys, announced in the Union Budget, as another step forward for the sector.

"The sector can benefit from the higher duties on its competitors. The trade agreement with the US will also help us in a huge way," Kharbanda said.

However, he also stressed the need for Indian companies to expand their manufacturing capacities to meet rising demand.

Government initiatives, such as enforcing mandatory quality standards and raising customs duties on toy imports, have played a crucial role in boosting domestic production and reducing reliance on imports, particularly from China.

For years, India has been a net importer of toys, depending heavily on China for around 76% of its imports.

However, this trend is changing. Toy imports from China dropped from USD 214 million in FY13 to just USD 41.6 million in FY24. Consequently, China’s share in India’s toy imports declined from 94% to 64% during the same period — a clear indication of India’s growing competitiveness in the global toy market.

With inputs from news agency