Far from a happy toy story: Traditional toy makers face Chinese goods, high GST and lack of funds

While the Prime Minister says India has the potential to become a hub for the global toy industry, artisans face a range of problems. Appaji Reddem and Laiqh Ahmed Khan report on how an influx of cheaper Chinese toys, high GST, lack of innovation and funds, and inadequate training plague the traditional industry.

An artisan at work in Channapatna, Ramanagara district, Karnataka.

Bent over his lathe in one of the by-lanes of Kalanagar in Channapatna, about 60 km from Bengaluru, Meer Kaleem stares at his handiwork, a piece of wood that is taking the shape of a toy’s part, with deep concentration. While his nimble fingers continue their work, his face falls when he starts talking about the seemingly bleak future of the craft that has been the source of livelihood for three generations.

Business is yet to pick up for the famed Channapatna toys after a lockdown imposed across the country to contain the spread of COVID-19 stretched from three weeks to months. Only a few lathes are buzzing in the town. The lockdown worsened the woes of the craftsmen which began with the influx of cheap Chinese toys into the market. Demonetisation in 2016 and imposition of a 12% Goods and Services Tax (GST) on their products dealt additional blows to their business. “And now there is no demand for our products from local retailers. Merchants who used to come from different parts of the country are not showing up. Even exhibitions and fairs across the country, where many of our products are sold, remain closed,” says a worried Kaleem.

Notwithstanding

Prime Minister Narendra Modi’s mention of the brightly coloured Channapatna toys in his ‘Mann Ki Baat’ programme in August and emphasis on the promotion of locally manufactured toys, Kaleem isn’t sure if the industry can return to its heyday anytime soon. The hand-crafted wooden products, which wear coats of vegetable paint and lacquer, enjoyed a good market locally and abroad. He reminisces about the variety of necklaces, bangles, beads and napkin rings he used to carve out from the logs of ivory wood in his lathe, to meet export orders, about 15-20 years ago. “Our products were in great demand in foreign countries even till the late 1990s. But not anymore,” he rues.

The China crisis in Channapatna

The arrival of Chinese toys in the market at almost half the price of the Channapatna toys severely impacted the industry. The assembly line production of Chinese toys makes them far less expensive than the Channapatna toys, which are hand-crafted and hand-painted. Even though Channapatna toys are said to be more durable and safer for children (as they are coloured with vegetable dyes), the Chinese varieties rule the market, artisans say.

Channapatna toys date back to the reign of the 18th century ruler of the erstwhile Mysore kingdom, Tipu Sultan, who invited Persian artisans to train local artisans in making wooden toys . As ivory wood trees, easily distinguishable with their blooms of white, star-shaped flowers, were available aplenty in and around Ramanagara district, the craft flourished in Channapatna. Ivory wood trees help make lightweight toys. The uniqueness of the craft also helped the toys earn the Geographical Indication (GI) tag . The GI tag is a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin.

After more than 30 years in the toy-making industry, Kaleem, in his early 50s, does not see his sons taking forward the family legacy. All three of them have taken up other vocations. The number of artisans engaged in the toy-making industry is dwindling as their earnings fall well below the wages offered in other industries, he says.

However, Sunil Kumar, Assistant Director in the Office of Development Commissioner (Handicrafts), Mysuru, claims that the number of Channapatna toy artisans has remained more or less unchanged for many years now, even if it hasn’t increased in proportion to the growing population. About 1,500 of the 2,500 registered Channapatna toy artisans are active now, he says. Of them, about 1,000 are registered with the Karnataka State Handicrafts Development Corporation, which purchases finished products worth a maximum of ₹3,000 from each of the artisans in a month. Two common facility centres set up in Channapatna by the government authorities offer work spaces and lathes at a concessional rate to a few artisans, but a majority of artisans work on their own lathes set up in their homes. Special attention is also paid to the export-oriented toys at one of the two common facility centres, Kumar says.

With the Central government’s ‘Atmanirbhar’ policy expected to discourage or even impose a ban on the import of Chinese toys, the officials are hopeful that the fortunes of the Channapatna toy artisans may change. But self-reliance alone isn’t sufficient; the absence of innovation in the design of toys is an area of concern, officials say. Artisans, they say, habitually produce the same set of toys without any innovation. In contrast, the new and attractive designs and colours of the Chinese products score over the Channapatna toys.

 

Artisans like Krishna, who runs the Manjunatha Toys Store in Channapatna, counter this argument. Krishna displays a diverse set of products in his store, including utility items like car seats made of wooden beads, pencil sharpeners, tissue paper holders, and a variety of tops. Artisans are always willing to innovate as long as there is a market for the products, he argues. Workshops on design innovation, organised by the authorities, are few and far between, while designs introduced by the handicrafts department authorities and the prototypes approved by them rarely translate into a market for the artisans, he says.

Kumar says the government plans to create an online market for the artisans by facilitating their registration on the Government e-Marketplace portal.

Apart from the threat posed by Chinese toys and lack of innovation, there are other ills plaguing the Channapatna toy-making industry. As business is slow, some craftspersons tend to yield to the temptation of making quick money. “The ivory wood needs to be seasoned for at least three to four months before an artisan can start working on it. But a few artisans began making the toys without waiting for the seasoning period to end. The compromise shows in the quality of the product,” says artisan Syed Ameeruddin. A few artisans also use chemical dyes, which are considered harmful for children, instead of vegetable colours, he says. Many countries have strict rules against the import of toys with chemical dyes. As a result, some consignments fail to make the export quality grade.

Modi’s mention of the Channapatna toy industry comes as small consolation to the artisans who have been campaigning for withdrawal of 12% GST on their products as well as for intervention against the alleged hurdles posed by the Forest Department in the transport of ivory wood.

An industry with great potential

More than 700 km away, the toy makers of Etikoppaka and Kondapalli in Andhra Pradesh, and Nirmal in Telangana , see a ray of hope in Modi’s ‘Mann Ki Baat’ speech in which he had praised their efforts in keeping a tradition alive despite meagre returns. Lauding the revival efforts of the traditional artisan C.V. Raju of Etikoppaka in Visakhapatnam district, Modi said he wanted start-ups to promote the industry and secure the future of the artisans. He said that while the global toy industry is worth over ₹7 lakh crore, India’s share in it is minimal despite its wide variety of traditional and unique toys.

A back-of-the-envelope calculation by market players on the total annual business of wooden toy handicrafts in Etikoppaka, Kondapalli and Nirmal amounts to about ₹50 crore. This industry has tremendous potential and can provide employment to lakhs of people, according to market estimates.

Etikoppaka is a village on the banks of the Varaha river. Located about 65 km from the port city of Visakhapatnam, the village houses about 10,000 people. Over 200 traditional artisan families are part of the Etikoppaka toy-making industry in the village. The Etikoppaka signature toys include a standing couple, a wedding scene, automobiles, birds, and shehnai troupes. They are made with the soft variety of wood from the Ankudu tree. Like in Channapatna, here too artisans use only vegetable colours. “The soft-edged toys are useful for children. They help their eye-hand coordination, they help them recognise colours and enhance their motor skills. The industry also makes utility, decorative, ornamental and measurement utensils besides toys,” says farmer and artisan Raju, 57.

In Etikoppaka and Kondapalli, the rich tradition of the handicraft needs a larger push, says Raju. He says he wrote to the Department of Science and Technology and the National Innovation Foundation in 2019 seeking help to make his initiative Hasthakala an experiment, interpretation and experience centre of handicrafts. They said they would get back on the proposal, he says.

Industry players and artisans point out that an organised approach towards enhancing the skills of artisans along with subsidies, interest-free loans, scientific development of the industry, market interventions, and official supply of wood and lacquer would ensure the industry’s growth and competitiveness.

Appealing to start-ups

Modi’s mention of Etikoppaka has generated a lot of interest among start-ups and other business communities, says M.P. Dubey, joint director of Software Technology Parks of India (Visakhapatnam). “Etikoppaka handicrafts have a GI tag. That is a valuable resource for start-ups for mutually beneficial tie-ups. We did a lot of research on the sector and we are finding out ways of adding value to the craft so that it can become competitive in the global market. At the same time we have organised a meet to link interested start-ups with the artisans to explore multiple business opportunities for growth,” says Dubey.

Back in the village, the positive vibes from the Prime Minister’s talk reverberate in the form of progressive initiatives by the local artisans to expand business. A couple of groups have chalked out a plan to tap into potential opportunities with IT and other corporate firms. Adarsh, a student of IIM Bangalore, has organised a couple of artisan groups to tap into the corporate social responsibility funding of IT firms for promotion of the crafts industry. “The IT firms, as part of CSR, give a lot of support to upcoming industries and handicrafts. We have made a plan to contact the top 10 IT firms to ask them if Etikoppaka toys can be made a part of their gifting plans. We are also approaching big-ticket wedding organisers asking them to opt for these toys as return gifts. We have positive signals from the market,” says Adarsh.

Visakhapatnam , Andhra Pradesh : 16/10/2020: FOR GROUND ZERO : Women engaged in the making of traditional Etikoppaka wooden toys at their homes at Etikoppaka village, 80 kilometres from Visakhapatnam. Photo : K.R. Deepak / The Hindu

 

But funding poses a big problem to bulk manufacturing, says Ramanababu, president of the Etikoppaka Mutually-Aided Cooperative Society. The society urgently needs a ₹5 crore corpus fund to buy the toys in bulk from artisans and fulfil major orders, he says. “Most of the time we lose business not because of lack of expertise but the inability to fulfil expectations. Artisans are not in a position to make toys in bulk and store them with the society because of financial issues. A corpus fund can solve this problem. And there should also be a mechanism to arrest the volume of Chinese toys in our market. Chinese toys sell more than local toys even in places like Etikoppaka. The government should help us to be atma nirbhar this way. Many youngsters are ready to learn and pursue the handicraft,” he says.

The society is also concerned about the sharp fluctuations in the cost of lacquer. Lacquer costs anything between ₹300 and ₹1,100 per kg. The proposed fund is also expected to be used for bulk purchase of lacquer and supply it to artisans at a wholesale price.

On an average, an artisan gets ₹30,000 a month if he works five days a week. The income can be enhanced four times if the industry is promoted in the right way, say artisan associations.

Illegal wood in Kondapalli

The elegant toys of Kondapalli include wooden-painted bullock carts, a Dasavataram set, a palanquin, wedding sets, farmers in the field, and Sita, Rama and Lakshmana in a boat. The 45-year-old third generation artisan, Samala Satyanarayana, from Kondapalli village near Vijayawada, says the primary issue with the industry is its basic ingredient, the Tella Poniki wood, which is illegal to fell. “I’ve been making Kondapalli toys for 25 years. But I am forced to use illegal wood procured by woodcutters as respective governments have failed to regularise it despite our long-pending demand. The Forest Department can also get good revenue if the government agrees to our demand,” he says.

Here, too, artisans complain about GST. And now COVID-19 has led to a steep fall in business. The orders from the government-owned Lepakshi have also come down, they say. Regular bulk orders come from private purchasers in Tamil Nadu and Karnataka.

Artisans say that they are given short-term training by the skill development corporation. Training for 15 days to three months is not sufficient, they say. At least a year of training is required for professional expertise in the craft. “We need authorised wood. It needs to be supplied by the government after treatment so that it is immune to pests. The treatment plant is too expensive for us to establish,” says one artisan.

The artisans, who are using their own innovative methods and advanced tools to make toys, say that the government can help them create innovative tools to enable faster manufacturing. “It’s a long process but it will work if the government takes interest. Making toys faster is also important in the age of technology. Sometimes, we get bulk orders from corporates but usually they give very little time for manufacturing,” says Satyanarayana.

Online marketing avenues too are not working well for the artisans, he says. Higher prices on Amazon and Flipkart means fewer customers. “We also need subsidised loans. Interest-free loans would work well for us. Right now we have a loan with a 9.5% interest rate. Now there is a huge dip in demand due to the pandamic. There are fewer orders, there is pressure from private lenders, maintenance costs, etc., and there is no support from any direction as usual,” laments one artisan.

Meanwhile, efforts by artisans and local leaders to build a facility to promote the industry have borne fruit. The work related to a new artisan facility in the place of an old one in the middle of Kondapalli has advanced. The proposed building for wood processing is under way, according to Vijayawada MP Kesineni Srinivas (Nani). “We facilitated a ₹1.8 crore MSME fund, and a matching grant of ₹50 lakh was allocated from my MPLAD funds. The facility will be built soon,” Srinivas told The Hindu .

Demand for eco-friendly toys

To encourage the next generation to take the legacy of toy-making forward, the government should provide funds and old-age pensions, says B.R. Shankar, manager of the Nirmal Toys and Arts Industrial Cooperative Society. The number of families who make the finely carved Nirmal toys in the towns of Nirmal in Adilabad district of Telangana has come down to 50 from over 100 a few years ago, says Shankar. “Apart from providing loans and longer training periods, the government should help us find ways to restart exports. There were no revival efforts after these handicrafts were banned by some countries few years ago,” Shankar says.

Market research reports suggest that there is greater demand for eco-friendly wooden toys across the world. There is a visible change in the way schools and households are looking at toys for children, say artisans. Toys made of plastic and other hazardous material are being replaced by wooden toys and toys made of other non-hazardous material. This provides wooden toy-makers a great opportunity to innovate and meet the surging demand. Artisans feel encouraged by Modi’s push, but the toy story can end well only if their many problems are addressed and the government manages to bring the industry out of the woods, they say.