Country’s imports of toys and their electronic components from China stop amid virus-hit shutdowns, prices shoot up by 40 per cent in the capital.
With no let-up in the Coronavirus outbreak in China, India’s toy industry has been badly hit. Traders have no way to replenish dwindling stocks as they are too dependent on the neighbouring country for their supplies.
Since electronic components are also mostly imported from China, Indian manufacturers of battery-operated toys or toys containing battery-operated parts are also in trouble.
“The epidemic has affected toy business in the country as most stockists import from China. The import of toys is zero now with stockists, distributors and retailers dependent on products left in their warehouses. The situation will remain the same for the next four to five weeks,” said Satish Sundra, the owner of an old toy shop in Delhi’s Connaught Place.
Unless China resumes production, and fresh consignments reach Indian shores, there is a medium-term production and supply crisis.
“China factories were shut for New Year from the first week of January. The last time we loaded our containers (not just for toys sector, but in general) was perhaps on January 15. Containers shipped from China must have already reached India. There will be no more arrivals for another three months now,” Vipin Nijhawan, vice-president, Toy Association of India (TAI) said.
Nijhawan, a prominent-Delhi based toy importer and manufacturer, said almost 70 per cent of his stocks are sold out. “If you don’t have enough varieties (of toys) you cannot sell, so it is a bit difficult to sell the balance. Even if everything goes well in China, next stocks will start arriving only by April-end or the first week of May. Till then we will have a supply constraint,” he said.
This problem is the same with every importer, but the toy industry, given its heavy dependence on China, is more vulnerable.
Global market research firm IMARC estimates India’s toy market to be worth $1.5 billion (over Rs 10,000 crore). There is no way to corroborate the numbers as the toy industry is largely un-organised in India.
What we do know is that India imported toys worth Rs 2,127 crore in 2018-19. Almost 90 per cent of that was from China. Another Rs 93 crore worth of toys came from Hong Kong during the same time. Considering that retail prices of imported products are often several multiples of invoice prices, IMARC may not be too off the mark in its estimates.
RETAIL PRICES JUMP
The immediate causality of this over dependence on China is an increase in prices. Delhibased retailers say the price of almost every toy has been hiked 30 to 40 per cent after the outbreak of Coronavirus in China. Nijhawan said, “Traders know they will not get fresh stocks in the next two to three months. That is why they are selling at higher prices. Demand is still there, the problem is with supply,” he said.
The government has also done its bit to increase prices in the country. Finance Minister Nirmala Sitharaman, in Union Budget 2020-21, increased customs duty on all imported toys by 200 per cent — from 20 per cent to 60 per cent. This resulted in protests from across all major trading hubs of the country.
Kolkata traders shut down their business for a day in protest. Mumbai traders complain the duty hike will lead to the closure of small retail businesses.
“In the last two years, we have seen the import duty on toys has been increased by around 500 per cent. This step will make toys unaffordable for customers, decreasing the sales tremendously and adversely affecting the livelihood of millions of people employed in the toy industry across India,” said Abdullah Sharif, Vice- President of United Toys Association, Mumbai. There is also a move to make safety standards more stringent for toys that are sold, imported or made in India.
Debasree Chaudhuri, Minister of State for Women & Child Development, has gone on record over the government’s plans to notify a
“Quality Control Order” for toys imported and manufactured in India. Though the government has assured that safety standards will not be too cumbersome, the move is bound to shake up the sector which is predominantly micro and small scale.
The crisis has led to scaremongering on social media ahead of Holi next month. One such message, circulating among toy traders of North India on WhatsApp, is about the possibility that Coronavirus-infected pichkaris (sprinklers) and water colours could arrive from China.
The virus, which originated in China, has killed about 1,900 people in that country and has spread to several other countries prompting the World Health Organisation (WHO) to term it a “Global Health Emergency”.
Though all stocks for Holi are already in Indian warehouses, the only risk retailers of made-in-China Holi-wares in India have at the moment is adverse customer sentiment as that is not always driven by rational thoughts, especially when it comes to toys for children.
Countrywide awareness programmes to avoid Coronaviruslinked scaremongering is the need of the hour, not just to help boost toy sales, but also to save Indian citizens from baseless fears.