Is India The Next Big Toy Manufacturing Hub? 

The answer is quite obviously Yes and NO! It is unlikely that we will ever see again a single toy manufacturing hub become as dominant as China was between the 1990s and 2019.

However, India is set to become a significant toy manufacturing hub due to some fundamental underlying strengths, which we will go into below… In the same way that international toy companies made China a significant manufacturing hub in the ’80s, it is in their best interest to do so again with India. Except, this time it will not take long to make India a single manufacturing hub like China.

According to Forbes, China’s population is currently on track to drop from 1.4 billion to 732 million in 2100. The reality is that at some point, and with a risk of this being sooner rather than later, China’s toy factories will either go out of business or find something more expensive to produce. This is a significant risk for the toy industry because right now, China’s capacity is still critical to ensure a sufficient global supply of toys.

At the same time, the other toy production hubs are growing but not yet ready to take on the bulk of toy production. Should the international toy communities choose to support India, it will help the industry in the long term because of the sheer population in India, which has overtaken China. The other crucial factor is that most babies are born in India, 23 million per year, and the toy industry can boom here more than in Europe and other developed countries.

So if the global toy business found itself in a situation where it had to ramp up production capacity outside of China quickly, only one country with the latent industrial capacity and workforce available to respond en masse—and that country is India.

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India is the only place where available labor force, plastic domain knowledge, and entrepreneurial factory owners can ramp up to any significant level in a comparatively short time.Companies that will benefit from going to India need to do a higher level of ‘hand-holding,’ and critical parts supply will typically benefit from some cost savings and the potential to increase available capacity rapidly. Other countries would have to play a part, of course. Still, India would have by far the largest quickly accessible production capacity, even versus Vietnam’s more established and currently larger toy manufacturing hub.

AVAILABILITY OF LOW-COST LABOR IS A MAJOR DRIVER OF TOY MANUFACTURING LOCATIONS AND INDIA HAS CHEAP, ABUNDANT LABOR.

The golden rule of toy sourcing is that toy production is most viable at the intersection of the component supply chain, capacity, labor availability, and low labor cost.

Today, India is more like China when toy production started to consolidate. India’s estimated population of 1.4 billion has an average salary of just over USD 5,000 p.a., with factory production line labor available for somewhere in the region of USD 2 per hour, less than half of what is currently expected in China.

India has one of the youngest populations in the world—more than 67% of the population is between the ages of 15-64. Also, to put the workforce in a comparative context, India has more than 500 million workers, with a few more hundred million potentially available to work but without opportunity. As the primary toy manufacturing hub outside China, Vietnam has 56 million people in the workforce. According to UN projections, India’s population is expected to peak at about 1.7 billion in 2064. Currently, more than 40% of the country’s residents are younger than 25, and the estimated median age in 2023 is 28—nearly a decade younger than China’s—according to UN data.

So, India is the only country with a similar population size as China but with much more potential labor availability for production labor line work on low-cost products like toys. India’s economy and workforce are crying out for more employment opportunities.

Vietnam is currently the second biggest toy manufacturing hub, with over one hundred export-level toy factories. Compare that to China’s estimated 5,000 to 10,000 toy factories, and you can see how big the challenge is & just how much progress still needs to be made in developing production capacity outside of China. One notable feature of Vietnam’s toy factories is that Chinese business people predominantly own them.The fundamental difference between India & places such as Vietnam is that India aspires to produce all the component elements of toy production locally and looks likely to do so eventually. In contrast, Vietnam is more reliant on a supply chain from China and looks set to remain more dependent on China versus India.