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How India's toy story can help boost economy

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India’s toy market has the potential to grow to $2-3 billion by 2024 (from $1.7 billion in 2017), and for every $100 million investment in the sector, 20,000 direct jobs, and 8,000 indirect jobs can be createdHow India's toy story can help boost economy

If one had walked into a toy store in India a few years ago, there would be an 80 percent chance they would be laying their hands on a ‘Made in China’ product. This is because the Indian market was flooded with imported toys, with eight out of 10 toys sold being predominantly imported from China. Even though the Indian toy industry boasts a rich heritage, Indian manufactured toys contributed to just 20 percent of the domestic market.

At Rs 328 crore and Rs 1,936 crore respectively, the import of toys was six times more than the export in 2014-15. The industry was languishing due to a lack of investment and technology, and competition from cheap im­ports. Traditional toys had long been forgotten, and local industry was fragmented.

Even though the industry had recorded double-digit growth in 2014-15, around 40 percent of Indian toy manufacturing units had closed down, and another 20 percent were on the verge of closure. The ones remaining were either static, or their productivity levels were declining.

Then in the last three years, something changed. From being a net importer, the Indian toy industry turned into a net foreign exchange earner. India’s import of toys fell by 70 percent from $371 million in 2018-19 to $110 million in 2021-22, while exports rose by 61.4 percent, from $202 million to $326 million in the same period. In the quarter ending April-August 2022, the country’s toy export registered a 636 percent growth, over the same period in 2013!

State Of Play

COVID-19-induced supply disruptions in 2020 would have sent an industry that was largely dependent on imports for its survival to its grave had it not been for two key interventions by the Government of India.

First, in February 2020, the government increased basic customs duty from 20 percent to 60 percent. A year later, in January 2021, the government issued the Toys (Quality Control) Order, making it mandatory for all toy manufacturers, from India and overseas, to get BIS (Bureau of Indian Standards) certification for selling toys in India.

Combined, the two measures helped deter both cheap and high-quality imports, while allowing local manufacturing to flourish. Sending the right signal to India’s major markets like the United Kingdom, Germany, and the Netherlands vis-a-vis maintenance of international standards, longstanding public health concerns around Chinese toys — 67 percent of which had been found to be highly-toxic were also alleviated. The new BIS rules encouraged many toy importers to get into manufacturing, and turn exporters to markets in Africa and West Asia.

At the same time, with an aim to boost traditional toy-making, and integrate the manufacturing and production ecosystem of toys, 19 toy clusters were approved.

Toying With New Ideas

India’s protectionist push for the toy industry may have come at a time when the country was witnessing intense skirmishes with China, yet, given India’s vast export potential, the size of its domestic market (above 300 million children), and the employment potential of the toy industry, the ‘aatmanirbhar’ is a welcome one.

The measures taken so far are however a very small beginning in self-reliance, and if India wants to become a global player in toy manufacturing, building its image as a trustworthy destination for quality manufacturing may be a better way to move ahead, than just curbing imports.

The scope is immense. Given the right impetus, the Indian toy market has the potential to grow to $2-3 billion by 2024 (from $1.7 billion in 2017), and for every $100 million investment in the sector, 20,000 direct jobs, and another 8,000 indirect jobs can be created.

The Challenges

The toy industry is still highly fragmented, dominated by local producers (60 percent of India’s 4,000 toy manufacturers are unorganised), and lack innovation, and resources to invest in equipment and technology. Supply chains in the country are still highly fragmented.

To encourage competitiveness, the Centre could support the industry in setting up more clusters, subsidies on exports, and production-linked incentives for their manufacture, as well as toys to be incorporated in India’s Free Trade Agreements (FTAs). The Centre’s support in the form of incentives, as well as inputs on technology upgrade, can go a long way in helping the domestic industry grow swiftly.

Re-skilling the 7 million artisans in the country to help them meet the evolving demands of the industry while framing labour laws and regulations that protect workers’ rights can also help reap dividends.

Toy manufacturing is an ideal sector to revive a slowing economy. Solving for quality, skilling, and supply chain issues, the projected growth of the Indian toy industry looks imminent.

Share Market Closing Note | Indian Stock Market Trading View For 13 October 2022

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Share Market Closing Note

Indian benchmark indices ended on negative note on October 13 amid volatility.Stock market holidays 2022: BSE, NSE to remain shut on these 3 days in  October - Hindustan Times

At Close, the Sensex was down 390.58 points or 0.68% at 57,235.33, and the Nifty was down 109.30 points or 0.64% at 17,014.30. About 1283 shares have advanced, 2054 shares declined, and 130 shares are unchanged.

Wipro, Adani Ports, SBI, SBI Life Insurance and L&T were among the top Nifty losers. HCL Tech, Sun Pharma, Coal India, Britannia and Tata Motors were the top gainers.

Barring metal and healthcare, all other sectoral indices ended in the red.

BSE Midcap index and Smallcap indices fell 0.5 percent each.

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Topic :- Time:3.15 PM

Nifty spot close above 17000 level will result in some upmove in coming sessions and if it closes below above mentioned level then some sluggish movement can be seen. Avoid open positions for tomorrow.

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Topic :- Time:12.50 PM

Just In:

AB Money reports Q2 earnings:

Net profit up 51.1% at ₹9.7 cr vs ₹6.4 cr (YoY)

Revenue up 18.5% at ₹68.2 cr vs ₹57.5 cr (YoY)

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Topic :- Time:12.30 PM

COPPER Trading View:

COPPER is trading at 650.50.If it manages to trade and sustain above 651.20 level then expect some further upmove in it and if it breaks and trade below 649.50 level then some decline can follow in it.

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Topic :- Time:12.15 PM

Just In:

UK wants stronger trading relationship with India, foreign minister Cleverly says:

British foreign minister James Cleverly said on Thursday Britain wanted to have an even stronger trading relationship with India after reports that remarks by a fellow minister about Indian immigrants could put a future deal in doubt.

Asked about the comments made by interior minister Suella Braverman about Indian migrants in Britain and the possible impact, Cleverly said: We do want to have an even stronger, and its strong already, but an even stronger trading, relationship with India.

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Topic :- Time:12.00 PM

Nifty is declining however it is trading near its key support. Nifty spot if breaks and trade below 16940 level then expect some further decline in the market and if it manages to trade and sustain above 17000 level then some pull back can be seen.

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Topic :- Time:11.30 AM

News Wrap Up:

1. Sensex extends slide, down 450pts; Nifty50 below 17,050

2. Indias share in venture capital funding falls sharply; China surges ahead

3. Run-up to Budget: Monetary threshold for GST offences may rise to Rs 25 cr

4. Wipros secret of reducing attrition: Quarterly promotions, salary hikes

5. Centre allows exports of 397,267 tonnes broken rice backed by LoC

6. Adani Wilmar falls 4% on low single digit revenue growth guidance for Q2

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Topic :- Nifty Opening Note

Indian Stock Market Trading View For 13 October 2022:

Nifty to trade volatile and is likely to follow global cues. Trade as per market trend.

Nifty spot if manages to trade and sustain above 17160 level then expect some upmove in the market and if it breaks and trade below 17080 level then some further decline can follow in the market. 

Please note this is just opening view and should not be considered as the view for the whole day.

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The world is selling US treasuries and that is bad for the RBI

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The RBI is exposed to the double whammy of valuation risk due to the dollar's rise, as well as interest rate risk from the rise in bond yields

The world is selling US treasuries and that is bad for the RBI

In the decade after the 2008 financial crisis, global central banks and institutions have been bingeing on US treasury bonds because they ticked all the boxes of safety, liquidity, and returns. This trend is now reversing as the relentless rise of the greenback has triggered central banks to take measures for their own economies.

That has meant that the biggest buyers of US treasuries are now turning sellers as they step in to shore up their own markets.

In 2021, Japan, China, United Kingdom, Ireland, and France were the top buyers of US treasury notes that have turned net sellers in the first seven months of 2022, data from the US treasury department shows.

In total, foreign investors and institutions sold a massive $246 billion worth of US treasuries during this period. That’s a 3.2 percent drop in their holdings within a few months as against a 9 percent build-up in the year 2021. The treasury department will release data for August next week and it is expected that the holdings will come down further.

This selling pressure is one of the reasons behind the sharp 13 percent fall in the US Treasury total return index this year. In short, holding US treasuries has been disastrous for investors.

What does this have to do with the Reserve Bank of India (RBI)? The RBI invests its foreign exchange in securities that are liquid and safe, such as government bonds and bank deposits. As of July, India held $202 billion worth of US government bonds. That translates to roughly 27 percent of the forex reserve pile at that time.

The RBI must mark its holdings to market prices at the end of every week per its accounting policy. The mounting mark-to-market losses due to the surge in US treasury yields has eroded the value of the central bank’s foreign exchange pile. Indeed, Governor Shaktikanta Das had pointed out that more than half the fall in forex reserves has been due to valuation changes. The RBI is exposed to valuation risk due to the dollar’s rise, as well as interest rate risk from the rise in bond yields.

Sure, the erosion from the mark-to-market hit on bonds is optical as the losses booked are notional. That said, an optically worsening forex reserve position is enough to worry the market.

Forex reserves have dropped by $105 billion in the past one year, triggering anxiety that the central bank is losing its firepower to defend the rupee. As global central banks continue to sell US treasury bonds, the RBI will have to face the double whammy of valuation erosion and mark-to-market hit on its forex reserves portfolio.

At the same time, the RBI has been buying US treasury notes during the period when other major investors were net sellers. As such, for the RBI there aren’t many options to invest its forex reserves in. After all, the US bond market is the largest and most liquid globally.

Compared to the pain across UK government bonds in recent weeks, US treasuries look better by way of a smaller loss to investors. That said, as institutions globally continue dumping government bonds of major economies, the ones holding these papers, such as the RBI, would need to contend themselves with big losses in the short-term. Tactical purchases and active management may reduce the pain somewhat. But when large bond markets bleed, India’s central bank would need to feel the pain too.

Adani Wilmar crashes as company warns of low revenue growth

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The company said, “Rising interest rates, slow uptick in rural demand, and delayed withdrawal of monsoon in major parts of India impacted business in the quarter gone by.

Adani Wilmar crashes as company warns of low revenue growth

FMCG firm Adani Wilmar’s share price tumbled over 3.6 percent on October 13 after the management said that overall revenue in the September quarter is expected to grow in low single digit and volumes in the first half of the fiscal will clock low double-digit growth.

At 10 am, the stock was quoting at Rs 683 on the National Stock Exchange. This year so far, it has been one of the best performing stocks surging over 150 percent.

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In an exchange filing, the company said, “Rising interest rates, slow uptick in rural demand, and delayed withdrawal of monsoon in major parts of India impacted business in the quarter gone by.”

Leveraging the pan-India distribution of edible oil business, food & FMCG basket for the company continued its growth trajectory, expanding over 40 percent. “Edible oil business witnessed higher volume growth in the masstige category rather than the premium category as a result of downtrading,” the filing added.


The company is hopeful of sequential improvement in demand trends. Consumption may see an uptick in the second half of the fiscal on the back of festivities and softening of prices across food categories, the management said.

Brokerage firm Ventura Securities has a buy rating on Adani Wilmar with a target price of Rs 949: “The food category is a large space that is significantly underpenetrated and has decadal growth opportunities ahead. Adani Wilmar is sacrificing immediate profitability to grow rapidly and gain market share."

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