‘Hike in import duty could lead to 100% surge in MRP of toys’

Forum Gandhi Mumbai | Updated on February 18, 2020 Published on February 18, 2020

Toymakers say country lacks capability in local production

Indian toy importers, traders and retailers, who are already reeling under the impact of the economic slowdown have warned that the recent hike in import duty would lead up to 100 per cent surge in the MRP of imported toys in the domestic market.

The United Toys Association (UTA) also said the impact of coronavirus in China could lead to a short-term mismatch between demand and supply in the industry.

The import duty on toys was recently increased from 20 per cent to 60 per cent.

Speaking to BusinessLine, Farooq M Shabdi, President of United Toys Association, said within 3-4 months of the hike in import duty, there will be an impact on availability of toys in India. Nearly, 85 per cent of toys sold here are imported.

Hurt by ‘Make in India’

The association, which has over 1,200 members, held a protest in Mumbai on Monday opposing the hike. “The government has turned a blind eye towards importers in order to promote ‘Make In India’. The initiative isn’t wrong; however, India doesn’t have the capacity to make these products in India,” Shabdi said.

He explained that India’s regulatory regime along with lack of skill, quality, research and development and infrastructure are the primary issues.

Rehan Dhorajiwala, a member of UTA, said when they represented their case with Finance Minister, they were directed to meet Commerce Minister Piyush Goyal. “We have made our representation, and have taken an appointment with Goyal.”

Gulshan Hasija, spokesperson of UTA, said: “The industry saw a sales decline of 20 per cent last year due to the economic slowdown. We were just recovering from it when the duty hike was announced. Now, there is also uncertainty over imports from China due to the coronavirus.”

As much as 75 per cent of the toys imported are from China, Shabdi said. “The coronavirus broke during the Chinese new year, and the country was shut for trade at that time anyway. Now, we are getting signals that there might be a short-term impact because of the coronavirus. Though it might not be huge, a mismatch [in demand and supply] is possible,” he added.

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Published on February 18, 2020
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