TN’s toy story is no child’s play

Tamil Nadu’s `600-crore toy industry is looking to attract both big investments as well as set up micro hubs to scale up MSME players. The aim is to capitalise on the clampdown on Chinese toy imports into India and make the most of the China + 1 opportunity in global markets. The state currently boasts two big toy makers – Mplastics or Microplastics, which signed an MoU for investing `683 crore in an integrated factory at Hosur, and Funskool, which has two facilities at Ranipet.

“With a strong manufacturing ecosystem, toymaking is a sector that TN can seek to diversify into especially in the less industrialised districts,” says Vishnu Venugopalan, MD and CEO, Guidance Tamil Nadu. “With adherence to global standards, TN can leverage the China+1 factor and emerge as an export hub for toys just like non-leather footwear and electronics,” he adds.

Tamil Nadu is the country’s second biggest toy hub after Maharashtra. India’s toy exports have gone from $129.6 million in FY20 to $152.3 million in FY24. With the mandatory quality control orders in place for both domestic and export products, toy manufacturers in India are aligning with global protocols. But this is both a boon and a bane. “Toy export is no child’s play. You need quality chemicals, ethical practices and certification and not everybody qualifies,” says Vijendra Babu, MD, Mplastics, which is the largest toy exporter in India. “We do contract manufacturing for national and global brands and the opportunity is huge,” he says. Walmart, for instance, has promised sourcing worth $10 billion from India “of which toys will be 24% to 30%”.

Funskool too contract manufactures for global brands but also sells local brands in the domestic market. “Exports to OEMs are a big part of our business. Our products are exported to the Middle East and North African markets and through OEM contract manufacturing we sell in US and Europe too,” says Philip Royappan, GM (marketing), Funskool India.

The trouble is global certification and other requirements make it difficult for small/micro players to scale up and export. And given that in Tamil Nadu the potential to create 30,000 jobs in toymaking will mostly come from MSMEs, this is a serious bottleneck. Take Bharani Woodworks, which has a wooden toy unit at Ammananthangal village. “We appreciate the support of central and state govts because without BIS, Indian toys would not be export worthy, but an ecosystem needs to develop quickly,” says its founder Lokesh K. “For wooden toys, for example, we need FSC certification for ethically produced timber, but India does not have FSC-certified local wood. We depend on imports for all our raw material, but I have to compete with Vietnam, Malaysia and China on cost,” he says.

The good news is the state govt is working on an ecosystem. “We need streamlining for exports as there are a lot of regulations such as C mark, AIA marks and certifications and we are looking to help with that,” says state MSME secretary Archana Patnaik. That support is critical if the state’s tradition of handcrafted toys is to gain a larger footprint in the market. “We’re trying to coax our entrepreneurs to revive alternate and traditional material and move away from plastic toys to making rag dolls and wooden toys,” says Patnaik. The state govt is setting up a micro cluster at Vilachery (Madurai) to make Bomma and Golu dolls for which it is applying for a GI tag. The `4-crore micro cluster can leverage the state’s traditional industrial strength in textile and wood work. “There is a huge opportunity particularly if we can leverage the state’s large textile sector,” says Patnaik. “We can upcycle waste from the textile industry into valuable toys and this also presents the opportunity to create jobs in rural Tamil Nadu.”

Lokesh agrees but says handicrafts are often not easily scalable. “The govt can reduce tariff for all the E Zero certified 100% non-toxic products,” he says. “Our best bet is to scale up volumes and match Chinese costs. At home and abroad,” he adds.

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