India lifts ban on Chinese toys

India on Monday lifted the month old ban on Chinese toys, after the country's toy dealers raised their voice against the ban and said they were threatened with being put out of business.

Commerce and minister industry Kamal Nath signed the order lifting the ban, said ministry officials, adding that the lifting of ban came into effect from 2 March, 2009 (See: India bans imports of Chinese toys for six months). 

Indian toy dealers have complained that they risk going out of business after toy prices soared by as much as 100 per cent following the ban. Many say they are running out of stocks.

Indian government said in a statement that China could resume toy exports to India on condition that the products are tagged with world consumer safety certificates like that of the international standardisation organisation.

India imposed a six-month ban on imports of toys from China on 23 January, 2009 on excuses of public safety and health. China rejected the ban, calling it act of protectionism, and said it would likely ask the World Trade Organisation (WTO) to probe whether the ban violates WTO laws (See: China may go to WTO on toy import ban by India).

Beijing was deeply concerned over those restrictions. Chinese vice-minister of commerce Zhong Shan met with Nirupama Rao, Indian ambassador, in Beijing on 3 February, where he expressed the hope that better communication would defuse trade tensions between the two nations.

At that time China expressed that it hopes India uses trade remedy measures more cautiously as the world economy is faced with grim challenges. Yao Jian, spokesman for the commerce ministry, said both G20 and APEC members have pledged to act against trade protectionism, and the two sides need to have more communication and cooperation to achieve mutual benefits (See: China concerned over Indian trade probes on its exports). 

The Group of 20 emerging and developed countries have pledged to avoid using protectionist measures to fight the worst economic slowdown since World War II.Finance Minister Pranab Mukherjee last month told a labour conference that India was worried over growing signs of protectionism and would oppose such moves at global forums.

India imported 1.2 million toys per week from China on average during 1992 to 2003, and China's toys claimed an 80 per cent market share in India in 1997.

The Indian toy industry is approximately worth Rs2,500 crore of which Rs1,000 crore is in the organised sector and the rest is in the unorganised sector.

It is estimated that China produces about 70 per cent of the world's toys every year, and South China's Guangdong province contributes about 70 per cent of that total. Beginning this month, many toy manufacturers from the southern regions have complained that their export channels to India were cut.

In November 2008, amid growing concerns over the safety of Chinese products, the EU and the US launched negotiations towards a common safety standard for Chinese toys. The new US standards set the maximum permissible lead content at 600 ppm (parts per million), effective February 2009 onwards.

From last August, Mattel Inc recalled about 21 million toys in a span of five weeks, many because of the excessive levels of lead paint.

However, the largest US toymaker later on admitted that the recall was the result of a design flaw in Mattel's design and apologised for damaging China's reputation.

China-India bilateral trade rose 41.6 per cent to $48.38 billion in 2008, with India ranking as China's No10 trading partner.