In 2002, China exported toys worth more than $8 billion to countries around the world. Chinese toys have, in fact, stormed world markets. In contrast, India exported toys valued at a measly Rs 120 crore (Rs 1.2 billion) last year.
"It is hard to comprehend now that at the beginning of the 1980s, the Indian and Chinese toy industries were on par. But prudent fiscal policies helped the Chinese build a behemoth. On the other hand, we are choking it to death," sighs Vishnu Aggarwal, president of the Toy Association of India.
Aggarwal is right -- government apathy has ensured that India's toy industry has remained a midget, while China's toy industry has powered ahead to become a world beater.
Toys were reserved for the small sector for years, till former finance minister Yashwant Sinha dereserved them in a Budget a few years ago. So economies of scale were ruled out.
That's now changed, of course. But the government has not exactly been pushing toy making or toy exports.
"In India, the major problem is the government's treatment of toys as a superfluous item," complains Aggarwal.
"Earlier, toys came under the handicrafts department. Then they were shifted to the plastics head and later to the electronic and computer software council.
Echoes an official at ESC: "The jurisdiction of toys has been moving from one department to another. It is now with the Sports Goods Export Promotion Council."
An SGEPC official, on the other hand, says that steps are being taken to promote Indian toys worldwide, without going into detail.
Government indifference apart, Indian toy makers simply can't compete with Chinese manufacturers on costs. Chinese toy companies produce for the world markets and enjoy economies of scale, something Indian toy makers don't have.
A study by the Toy Association of India shows that the share of local manufacturers in the domestic market has gone down to around 60 per cent from over 90 per cent five years ago -- although the Rs 1,300 crore market has been growing by 20 per cent a year. This has forced several local manufacturers to stop production and import and hawk Chinese toys.
"Be it Popeye or Garfield, every toy we manufacture in India has a duplicate of it coming from China with a low price tag," says Sandeep Mathur, marketing head at Hanung Toys.
Hanung Toys has the exclusive licence to manufacture the animated characters, Popeye and Garfield. Hanung has set up two units at the Noida Export Processing Zone, which is not very far from the Toy City.
It is implementing several processes to bring down costs so that it can match the costs of China's toy makers.
Mathur also says ruefully that top foreign makers of branded toys outsource toys from China but not from India.
The TAI blames the government for not providing protection to the local industry from cheap imported Chinese toys. Worse, last year toy manufacturing was brought under central excise; the latest Budget has exempted toys once more from excise duty.
Testifying to the sorry state of the Indian toy industry is Toy City in Greater Noida, on the outskirts of the capital. Only half-a-dozen companies have set up manufacturing operations in the park, though 134 companies were allotted space in 1995, when Toy City was conceived.
"When the Toy City was proposed, the industry had not envisaged these problems. Today, only those who could survive the crisis are looking at Toy City," said I F Agarwal, advisor to TAI.
Still, the six companies at Toy City have started receiving inquiries and orders from toy makers in Europe and the Middle East, says Raj Kumar of Creative Toys which has a unit at Toy City.
Creative Toys makes not only soft toys but also board games and mechanical toys. Another four companies are setting up plants at Toy City. Who knows, perhaps one day toys from India will catch on in world markets.
