Union Finance Minister Nirmala Sitharaman on Tuesday, 7 July 2026, addressed an event organised by the Toy Association of India in New Delhi, outlining the government's multi-pronged strategy to transform India into a globally competitive toy manufacturing hub under the leadership of Prime Minister Narendra Modi.

Context

Speaking at the industry gathering, Sitharaman highlighted that India is pursuing a comprehensive approach combining 'higher quality standards, policy support, cluster development, skilling and market access' to build a world-class toy manufacturing ecosystem. She specifically cited bilateral trade agreements with the UAE and Australia as critical enablers for Indian toy exporters seeking to access new markets.

The minister also named three central government schemes — PM MUDRA, Remission of Duties and Taxes on Exported Products (RoDTEP), and SFURTI — as instruments empowering manufacturers to 'scale, export and compete globally.'

Policy Backdrop

The policy architecture Sitharaman referenced has been assembled over the past decade. The Make in India initiative, launched in 2014, first positioned domestic manufacturing as a national priority, with toys later identified as a sector where India could shift from import dependence to export competitiveness under the broader Atmanirbhar Bharat framework.

On the trade access side, the India-UAE Comprehensive Economic Partnership Agreement, signed in February 2022, and the India-Australia Economic Cooperation and Trade Agreement, signed in April 2022, opened tariff-reduced pathways for Indian manufactured goods. The RoDTEP scheme, introduced in January 2021 to replace the earlier Merchandise Exports from India Scheme (MEIS), remits embedded duties and taxes to sharpen export price competitiveness. PM MUDRA, operational since 2015, channels micro-credit to small and micro enterprises, while SFURTI targets cluster-level regeneration of traditional industries to enable scale.

Toy manufacturing has been explicitly positioned as a test case for this integrated model — one that links quality upgrades, skilling pipelines, cluster infrastructure, and market-access diplomacy into a single export-push strategy.

Stakeholders and Impact

The primary beneficiaries of the policy stack are MSME toy manufacturers and small exporters, who have historically struggled to compete against lower-cost imports, particularly from China. Access to MUDRA credit addresses working-capital constraints, RoDTEP reduces effective export costs, and SFURTI cluster support helps artisan-based and small-scale units modernise production.

Trade agreements with the UAE and Australia provide preferential market access that large-scale exporters can leverage once domestic capacity and quality standards are raised. The skilling emphasis signals a recognition that labour quality, not just price, will determine long-term competitiveness in global toy supply chains.

What's Next

Analysts and industry observers will watch upcoming RoDTEP benefit data for the toys category to assess whether export volumes are responding to the policy push. Any new cluster approvals under SFURTI in forthcoming trade policy reviews or Union Budgets will indicate whether the government is scaling its cluster-development commitment. As India deepens its free trade agreement network, the toy sector's performance could serve as a benchmark for how similar labour-intensive industries are integrated into the country's broader export diversification agenda.