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International branded toys are all set to become costlier in India, with the government hiking customs duty on toys and games.
The Union Budget presented by Finance Minister Arun Jaitley on Thursday proposed to increase customs duty from 10 per cent to 20 per cent on toys such as dolls, puzzles, tricycles, toy scooters among others.
Industry players believe the hike in customs duty, coupled with the imposition of social welfare surcharge, could lead to an increase in prices of imported toys by 10-20 per cent.
John Baby, CEO, Funskool India, which is the licensed distributor of international brands such as Hasbro, Tomy and Lego said, “Prices for imported toys could go up by 20-30 per cent. Though, it will promote toy manufacturing in India. This could make some international toy companies to look at local production especially in infant and pre-school toy segments.”
Given the small size of the organised toys market in the country, international brands still heavily rely on imports. According to industry estimates, the size of the organised toy market in terms of retail sales value is pegged at about ₹2500-3000 crore. In addition, unorganised players also depend on cheaper Chinese imports.
Ishmeet Singh, Country Manager, India, Mattel said,” There has been a substantial increase in customs duty to 20 per cent for the category of toys and sports goods. This combined with the other policy changes that have been implemented over the last 6 months, which includes higher rates of taxes under GST and stricter import regulations will result in an overall increase in the price of toys by more than 20 per cent.”
In September last year, the government had notified new standards for toys making it mandatory for all imported toys to be tested locally and comply with standards prescribed by Bureau of Indian Standards.
Another senior executive with an international toy brand said, “We need to get more details on whether this hike is only for certain categories of toys or for the entire range of toys.
However, with the hike in the customs duty besides the imposition of the social welfare surcharge, prices could go up on an average by 5-10 per cent.”
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