KOLKATA: The government has imposed tough quality norms for imported toys and mandated certification of compliance by agencies accredited with Indian authorities — a move that can choke Chinese imports and boost local manufacture, but the Rs 5,000-crore local industry is worried about orders already booked for the festive season.
The comprehensive notification issued on September 1 prescribes norms for physical and mechanical properties, chemical content, flammability, and testing for indoor and outdoor toys for both electrically and mechanically operated ones — going far beyond the earlier norms. The notification by the Director General of Foreign Trade (DGFT) says import of toys shall be permitted freely only if the manufacturer abides by norms of the Bureau of Indian Standards (BIS).
Compliance has to be certified by an independent laboratory approved by an accreditation authority under the Department of Science and Technology. This will hit import from China, which accounts for nearly 70% of toys available in the Indian market. Lob Gupta, CEO, Fun Toys, said the new norms will have a big impact.
"Initially, there will be a big drop in imported toys from China. Government too will lose customs duty on account of this move. But safety standards will be ensured which is good for Indian children. The government should introduce BIS certification for India-made toys too," Gupta told ET.
Electric toys, swings, slides and similar activity toys come under the ambit of the new government stipulation. The toy industry is worried about consignments already booked before the new norms came into force.
"This is the peak time for the toy industry and will continue till January. If some importer has ordered in August and his consignment is to land in September, then he will face a lot of problem to get clearance. We are not sure which are the laboratories from where we will get the conformance certificate," said Manish Kukreja, president of All India Toy Manufacturers Association.
Kukreja is of the view that the importers should have been given at least three months' time. However, a section of the toy industry feels the move may help domestic toy manufacturing industry as it is finding it difficult to compete with cheaper Chinese imports. The domestic toy industry, which is largely a mix of organised and unorganised units, employs nearly 25 lakh people. Most of these units are located in West Bengal, Uttar Pradesh, Maharashtra, and Andhra Pradesh.
There are more than 2,000 registered units and at least 40% of these have already shut shop in the past five years, an industry executive said.
"It is a much-needed quality reform which would be beneficial for Indian children. However, importers should have been given some time so that pending orders lying offshore could have been imported. The DGFT notification comes at a time when the toy business is going through a bad patch since last November, when demonetisation was announced and the overall taxation has increased following the introduction of GST on July 1," Gupta of Fun Toys said. Electric toys attract 18% GST against the earlier 12% VAT, while other toys attract 12% GST versus 5% VAT earlier.
Source: economictimes.indiatimes.com