The government plans to come out with a production linked incentive (PLI) scheme for toys and the leather sector to boost domestic production.

The proposed PLI schemes would be accommodated under the existing incentive package of Rs 1.97 trillion announced for 14 sectors over 10 years through 2030.

Officials said the PLI schemes are showing significant dividends across many sectors. The intention is to also roll out this PLI scheme for more labour-intensive sectors such as toys, leather and footwear and other such sectors where employment benefits will be more significant.

Stating that the discussions are in the initial stages, the officials said the PLI scheme for toys is likely to have an outlay of Rs 3,500 crore, while footwear and leather would be apportioned about Rs 2,600 crore.

However, these numbers would undergo many changes during inter-ministerial consultations, and the final decision on the outlay will be taken only by the cabinet, they added.

Toys and footwear and leather are amongst the top choices for the government as they are not only labour-intensive but steps have already been taken to make the sectors attractive for investments.

The toy industry is among the fastest-growing globally, projected to reach $3 billion by 2028, growing at a CAGR of 12 per cent between 2022 and 2028, according to Invest India.

In the last few years, the government has introduced several policy measures to give domestic toy manufacturing a boost, including tripling the import duty on toys and its components from 20 per cent to 60 per cent in 2020. It was further increased to 70 per cent with a view to curb imports and boost local production.

It then made toy quality certification mandatory and enforced quality control for imported toys from September 1, 2020 to ensure that only products conforming to standards enter the country.

India’s toy exports have surged 60 per cent since 2018-19, rising from $203.46 million to $325.72 million in 2022-23, minister of state for commerce Som Parkash told Parliament.