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Domestic toy makers seek clarity over tax structures

Indian toy market totals to an estimated Rs 10,000 cr, only Rs 2,500 cr contributed by domestic players

Press Trust of India  |  New Delhi 

Faced with stiff competition from China, domestic toy manufacturers want government support and clarity over local tax structures for homegrown players to have a level playing field.

"Indian toy market is estimated to be around Rs 10,000 crore, out of which only Rs 2,500 crore is contributed by the domestic players. Rest is mostly coming from China. It is affecting the domestic manufacturers and we want a level playing field," The Toy Association of India (TAI) President Raj Kumar told reporters here.

Asked what steps must the government take up to help the domestic players, he said: "We need clarity on the taxation structure on toys. Currently it varies from 0-15% and cetegorisation of toys are very vague and confusing."

He further said proper attention must be given to the toy industry and concrete steps must be taken up such as the setting up of two toy zones in Mumbai and Delhi as recommended by the National Productivity Council (NPC) in 2009.

Besides the two toy zones, NPC had recommended to set up a R&D centre for toys in the country.

"With the help of Ministry of Commerce, a 5-acre land parcel was acquired in Greater Noida for this purpose, but nothing has come out there yet. Our industry falls under Ministry of Micro, Small and Medium Enterprises and we want a proactive approach from them," Kumar said.

Kumar was speaking at the 6th Toy Biz International -- a business to business exhibition, which kicked off today here. It will be held till July 2.

"In this exhibition, 5,000 buyers are expected and 10,000 visitors are likely to attend. Total 85 stalls are there, out of which 5 are foreign exhibitors," he added.

On the business expectations from the expo, Kumar said about Rs 1,500 crore business were generated in the last year's exhibition and "we are expecting little over than this during the ongoing show".

As per TAI estimates, the Rs 2,500 crore domestic market is growing at a rate of 15% every year. India is the world's 19th largest exporter and 10th largest importer.

The global toy market is estimated to be around USD 85 billion and India contributes only about 1.5% of that.

Nearly 70% domestic toys are made in the National Capital Region, while Mumbai accounts for 25%. The rest of the toys are manufactured in Andhra Pradesh, Gujarat, Karnataka, Maharashtra, Punjab, Tamil Nadu, Uttar Pradesh and West Bengal.

Kumar said India employs around 30 lakh workers in toy manufacturing business, out of which 70% are women.

"There are 1,500 toy manufacturing units in the organised sector, besides innumerable unorganised units," he added.

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First Published: Fri, June 29 2012. 16:27 IST