Centre Plans Customised Incentive Scheme for Toy Industry, Moves Away from PLI Model

 In a strategic policy shift, the Indian government is preparing to roll out a customised incentive scheme for the domestic toy industry, moving away from the Production Linked Incentive (PLI) model that had long been anticipated for the sector.

According to a senior official, the proposed scheme is expected to mirror the structure of the recently introduced Electronics Component Manufacturing Scheme (ECMS), which offers differentiated incentives based on turnover, capital expenditure (capex), or a combination of both. "We are bringing in a sector-specific scheme for toys. It won't be under the PLI framework, but the objective is similar to what the government achieved with smartphones. The concerned ministry is finalising the details," the official said on May 19.

The PLI scheme, launched to boost manufacturing across multiple sectors, offers financial rewards tied to measurable outcomes like increased production and sales. While successful in areas such as smartphone manufacturing, the scheme has yielded mixed results elsewhere, with less than 10% of the allocated ₹1.97 lakh crore utilised so far.

Officials believe a tailor-made scheme could better address the unique needs of the toy sector, which is largely fragmented and dominated by small-scale players. The new plan aims to promote domestic manufacturing, enhance export competitiveness, and build a strong ecosystem for “Made in India” toys.

The move comes as India’s toy exports saw a dip—falling to $152 million in 2023-24 from $177 million in 2021-22—due to a global slowdown in demand. While the industry had been lobbying for a dedicated PLI scheme, the government appears more inclined towards a flexible, sector-specific approach to deliver sustainable growth.