Kolkata, India — Succumbing to protests from consumer activists and pressures from local toymakers over cheap, toxic and substandard Chinese toy imports, India has banned toys from China for six months.
Fears of a clampdown had been wafting for a while. The axe finally fell on Jan. 23, sharply dividing India’s toy industry between local manufacturers who say that cheap imports are harming their market and importers who say that local toymakers are simply seeking unwarranted protection.
The ban has also dealt a further blow to the Chinese toy industry, which saw about 4,000 closures last year as global recession cut demand while some countries tightened safety standards.
India’s temporary ban covers almost all types of toys from China – wheeled vehicles, dolls, stuffed toys, toy guns, wooden and metal toys, musical instruments, electric trains, puzzles and also toy components.
Although India’s Directorate General of Foreign Trade in its notification on Jan. 23 did not cite any reason for the ban, reports quoting directorate officials said the reason was concern for public health, since Chinese toys are known to have high toxic content that not only threatens children but also harms the environment.
The Mumbai-based Consumer Welfare Association is believed to be the primary instigator of the ban. “Despite the global outcry over toxicity of its (China’s) toys, India continued to import toxic toys in large quantities and even if the authorities were aware of the problem, they preferred to turn a blind eye, which forced us to file public interest litigation against the government and the pollution board in December last year,” said A.M. Mascarenhas, the association’s secretary. “Although we can’t claim that our litigation was instrumental in bringing in the ban, it was nevertheless long overdue.”
China’s toy industry became the center of global controversy in August 2007 when U.S. toy giant Mattel recalled millions of Made in China toys of the Fisher-Price brand from its U.S. and British markets after finding high levels of lead paint and dangerous magnets in some of them.
The recall also triggered panic in India, where the increasing dominance of Chinese toys in local markets became a serious concern. When the nongovernmental group Toxic Link tested both Indian and Chinese toys, it found a high concentration of lead and cadmium in Chinese imports.
According to Toxic Link, the lead content in Chinese toys sold in India was far higher that those that Mattel discovered in its Chinese imports.
“That’s when the Indian government realized the problem and started tracking imports as well as local toy manufacturers, who the government realized were not following proper standards either,” said Ashok Jain, president of the Mumbai-based All India Toy Manufacturers Association.
“However, since the volume of Chinese imports was still much lower than what it is now, the government chose to ignore that development,” Jain said.
Two years ago toys imported from China accounted for less than 50 percent of the Indian toy market, which was worth US$300 million. Since then Chinese imports have swamped India and now command over 70 percent of the close to US$360-million market.
But according to Jain, India cannot point fingers only at Chinese manufacturers. He believes that India’s local importers are also to blame, as in their zest to capture local markets they too started cutting corners.
“Indian toy importers started undercutting local prices and in order to stay afloat were asking for ridiculously low prices from Chinese toymakers. That forced them to resort to inferior and thus toxic raw materials for making products for the Indian markets,” said Jain. “Interestingly, some of the Chinese toymakers that ship products to India also export to well-known outlets in the U.S. and U.K. and face no complaints there.”
That aside, illegal importers also play a role in this murky game. For instance, electronic products like mobile phones are smuggled into India in cartons filled with cheap toy phones. The entire consignment is declared as toys to custom authorities to evade suspicion. “These cheap toxic phones end up being sold in toy markets after customs clearance,” said an industry source.
Of course local toymakers are elated by the ban. “The ban is good for local toymakers and will give us a chance to reclaim our lost market share,” said Raj Kumar, an official from the Delhi-based Toy Association of India.
Besides, according to Jain, the government has not just imposed a ban on Chinese toys but is also formulating strict standards in line with European 11-point manufacturing standards that will be mandatory for local toymakers as well.
“Soon, Indian toys too will be able to compete with the Chinese toys in the global markets,” said Jain. “The six-month ban along with the new standards that Indian toymakers will have to follow would allow the industry to gear up to meet the higher international standards.”
Nevertheless, the country’s toy industry, comprising local importers and local toymakers, remain divided on the ban. “DGFT did not give any official reason for the ban and it is hard to tell whether the ban was triggered really by health concerns or to protect the local toymakers. Having lost to Chinese imports, they have started crying hoarse to the government for the past few months, and maybe this is actually meant to give them an opportunity to catch up,” said Bashir Ahmed, a Mumbai-based importer of toys from China.
According to Ahmed, if health concerns are the real issue India will have few toys left. “The quality of Indian toys is no better. The government will have to ban them as well, leaving little for our kids.”
Meanwhile, even as India decides on how it can make toys safer for millions of children, it is clear that Chinese toymakers are not going to take this ban lying down. Reports emanating from Beijing suggest that China is already planning to drag India to the World Trade Organization to challenge the ban, which it considers an illegal trade barrier.
Trade experts also feel that unless India provides clear reasons and supporting evidence to justify its action, the ban may not hold water at the WTO.
Source : piasia.com