India’s Big Push to Revive the Toy Industry: USD 1.6 Billion Scheme in the Works

The Indian government plans a ₹13,000 crore initiative to boost domestic toy manufacturing, reduce import reliance, and create jobs. Led by DPIIT, the scheme includes financial incentives like Turnover-Linked, Localisation-Linked, and Employment-Linked benefits. It aims to attract investments, enhance local raw material production, and integrate India into the global toy value chain. Currently under discussion, the initiative supports self-reliance and positions India as a competitive global toy production hub.

The Indian government is gearing up to launch an ambitious initiative aimed at revitalizing the domestic toy manufacturing sector. With a proposed outlay of ₹13,000 crore, the scheme is designed to not only bolster job creation but also position India as a prominent global hub for toy production. This effort is being spearheaded by the Department for Promotion of Industry and Internal Trade (DPIIT) and seeks to reduce the country's heavy reliance on imported toys while addressing cost disadvantages compared to manufacturing giants like China and Vietnam.

Financial Incentives to Boost Local Manufacturing

If approved by the Union Cabinet, the program will feature targeted financial incentives to encourage domestic toy manufacturing and the production of key raw materials. Industry insiders have revealed that the scheme will include three primary types of incentives:

1. Turnover-Linked Incentive (TLI): Companies achieving growth in sales and investment beyond a specified base year will be rewarded.

   
   

2. Localisation-Linked Incentive (LLI): Financial benefits will be offered to manufacturers who source a significant share of raw materials locally.

   
   

3. Employment-Linked Incentive (ELI): Businesses hiring new employees will receive monetary support, subject to a defined cap.

   
   

Additionally, manufacturers willing to invest over ₹500 crore may benefit from concessional basic customs duties, provided they meet criteria like incremental investments, sales thresholds, domestic value addition, and export performance.

A Step Towards Self-Reliance

The proposal aligns with Finance Minister Nirmala Sitharaman's announcement during the Union Budget FY26, which emphasized the creation of a national action plan for the toy industry. While a production-linked incentive (PLI) scheme worth ₹3,489 crore had been floated earlier, it was shelved as officials opted to evaluate the effectiveness of existing PLI programs before introducing new ones.

Currently, the proposed scheme is undergoing inter-ministerial consultations and remains in the discussion phase. However, government officials are pushing for speedy approvals to ensure swift implementation.

Transforming India’s Toy Market

The goal of this initiative extends beyond local production. By addressing key challenges and creating a supportive ecosystem for manufacturers, the government aims to integrate India into the global toy value chain. This would not only meet growing domestic and international demand but also solidify India's position as a competitive player in the global toy market.

While the DPIIT has yet to comment publicly on the scheme, industry experts are optimistic about its potential to stimulate growth, create jobs, and reduce import dependency. If executed effectively, this could mark a significant milestone in India's journey towards becoming a leader in toy manufacturing.

This initiative underscores India's commitment to nurturing its domestic industries and fostering innovation. With the right execution, the scheme could open new doors for manufacturers and place India firmly on the global toy industry map.