Central Idea:
The article discusses India’s toy industry’s recent shift to net exports, attributing the success to protectionist measures under the ‘Make in India’ initiative. It raises questions about the efficacy of these policies and calls for a public release of an officially sponsored research study by the Indian Institute of Management Lucknow (IIM-L) to facilitate a more informed policy discussion.
Key Highlights:
- Between 2014-15 and 2022-23, India’s toy exports increased significantly, turning the country into a net exporter, while imports declined.
- An unpublished IIM-L case study, sponsored by DPIIT, credits the export success to promotional efforts under ‘Make in India.’
- The article questions the reported success and analyzes official statistics to understand the factors behind the industry’s turnaround.
Key Challenges:
- Lack of transparency regarding the IIM-L case study, creating ambiguity about the actual impact of ‘Make in India’ on the toy industry.
- Concerns about the sustainability of protectionist measures and the potential for “rent-seeking” behavior in the absence of complementary policies.
- The decline in labor productivity and other indicators in the toy industry despite protectionist measures.
Key Terms:
- ‘Make in India’ initiative.
- Net exports (exports minus imports).
- Protectionism.
- Non-tariff barriers (NBTs).
- Quality control order (QCO).
- Annual Survey of Industries (ASI).
- Fixed capital per worker.
- Gross value of output.
Key Phrases:
- “Turnaround in the labour-intensive industry.”
- “Rising protectionism since 2020-21.”
- “Infant industry argument.”
- “Learning by doing.”
- “Virtuous circle of expanding domestic capabilities.”
Key Quotes:
- “India has turned into a net toys exporter since 2020-21. ‘Make in India’ policies made it possible.”
- “Perhaps the IIM-L’s study uses different evidence to buttress its contention.”
- “Rising tariff and non-tariff barriers have made it possible.”
Key Statements:
- The article questions the correlation between ‘Make in India’ policies and the reported success in the toy industry.
- Concerns are raised about the impact of protectionism on the industry’s long-term competitiveness.
- Calls for transparency and public release of the IIM-L case study to facilitate informed policy discussions.
Key Examples and References:
- Reference to the tripled customs duty on toys in February 2020 and the imposition of non-tariff barriers since January 2021.
- Mention of the decline in labor productivity and other indicators in the toy industry despite protectionist measures.
Key Facts and Data:
- Toy exports increased significantly between 2014-15 and 2022-23, making India a net exporter.
- The trade balance for toys turned positive in 2020-21 after a gap of 23 years.
- Customs duty on toys was raised to 70% in March 2023.
Critical Analysis:
- The article critically examines the reported success of ‘Make in India’ policies in the toy industry, emphasizing the role of protectionism.
- Concerns are raised about the sustainability of protectionist measures and the need for complementary policies to enhance domestic capabilities.
- The decline in labor productivity challenges the notion that protectionism has led to improved industry competitiveness.
Way Forward:
- Advocate for transparency by making the IIM-L case study public to inform meaningful policy discussions.
- Emphasize the need for a comprehensive policy approach, combining protectionism with investment policies and infrastructure development.
- Encourage a dialogue on the long-term impact of protectionist measures on the toy industry’s competitiveness and the potential for “rent-seeking” behavior.
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