Enter an Indian toy store and, in addition to finding a child’s new favourite toy, you can learn more about the country’s struggle for improved commercial ties with its big neighbour, China. India increased tariffs on imported toys from 20% to 60% and finally to 70% six years ago in an effort to discourage local production and prevent inferior toys from entering its market.
Retailers were furious, claiming that domestic companies could never compete with products manufactured abroad. However, the combination of stricter quality control requirements and increased customs fees was effective. Indian toy exports increased from approximately $129 million to $200 million during the same period, while imports decreased by a third from nearly $300 million (£227 million) in 2020 to $100 million this year. Additionally, the nation was able to significantly lessen its reliance on China, which controlled 70% of the regional toy market.
In India’s usually fruitless attempts to correct an increasingly uneven trading relationship with its larger neighbor—which some experts claim is currently among the most asymmetric in the world—the industry stands out as a rare exception. Its trade deficit with Beijing has only increased, from $44 billion in 2020 to an astounding $112 billion this year, despite the fact that diplomatic relations between the two nations completely collapsed after the Galwan Valley clashes in 2020 and Delhi announced a number of anti-dumping duties and a ban on Chinese apps like Tik Tok.Kevin Zongzhe Li, a Washington-based Fellow at the Asia Society Policy Institute’s Center for China Analysis, told the BBC that while political, security, and investment ties were at their lowest point, India’s economic reliance on China continued to grow.
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