WEBVTT NOTE This file was generated by Descript 00:00:00.520 --> 00:00:04.740 Elsewhere, India announced a slew of measures to boost its manufacturing 00:00:04.740 --> 00:00:08.920 sector in Prime Minister Narendra Modi's first budget since winning a third term. 00:00:09.220 --> 00:00:10.993 For a decade now, Mr. 00:00:10.993 --> 00:00:14.750 Modi has urged foreign companies to move their production lines 00:00:14.790 --> 00:00:20.050 to the subcontinent in a flagship policy known as Make in India. 00:00:20.050 --> 00:00:23.590 Neha Punia visited a factory to see how this is playing out. 00:00:26.520 --> 00:00:31.770 Shaping not just children's dreams, But also crafting India's future. 00:00:32.430 --> 00:00:38.140 This is one of India's oldest and largest toy manufacturing firms, and 80 percent of 00:00:38.140 --> 00:00:43.609 the toys being brought to life here, from dolls to books, will be exported to the U. 00:00:43.610 --> 00:00:43.850 S. 00:00:43.879 --> 00:00:47.370 and Europe, but not under the company's own brand name. 00:00:47.759 --> 00:00:51.239 They mass produce products custom ordered by foreign companies. 00:00:51.795 --> 00:00:56.385 So our biggest market is USA and we are working with some of the 00:00:56.425 --> 00:00:58.195 top brands and retailers there. 00:00:58.875 --> 00:01:03.725 Sunlord Apparel started manufacturing plush toys three decades ago, but 00:01:03.754 --> 00:01:07.945 Karbanda says it was only after the COVID 19 pandemic that western 00:01:07.945 --> 00:01:12.074 companies started toying with the idea of diversifying their supply lines. 00:01:12.880 --> 00:01:13.539 from China. 00:01:13.809 --> 00:01:19.360 India is the o working population that c company 00:01:19.360 --> 00:01:25.100 employs 400 peopl toys every day. 00:01:25.329 --> 00:01:31.550 And compa and large labor pool is w companies to India. 00:01:31.550 --> 00:01:36.519 It's is hoping to leverage to jobs. 00:01:36.519 --> 00:01:41.425 In 2021, a major U Toymaker approached Sunlord Apparels 00:01:41.645 --> 00:01:43.065 with an offer to collaborate. 00:01:43.505 --> 00:01:48.294 Karbanda says their production has since more than doubled and now requests from 00:01:48.315 --> 00:01:50.565 other Western companies are piling up. 00:01:50.994 --> 00:01:54.875 Yes, we've already started a new factory last year which is focused 00:01:54.884 --> 00:01:57.265 more on, uh, high volume production. 00:01:57.824 --> 00:02:03.405 Uh, and, uh, we've got, uh, uh, we've got connections with 00:02:03.435 --> 00:02:06.164 quite a few large, uh, uh, U. 00:02:06.164 --> 00:02:06.304 S. 00:02:06.324 --> 00:02:09.534 brands who want to, uh, source from India who already visited 00:02:09.534 --> 00:02:10.764 the factory and audited it. 00:02:11.055 --> 00:02:15.894 In the last four years India's toy exports have increased, but even as 00:02:15.894 --> 00:02:20.795 the government markets India as a growing manufacturing hub, in truth, the 00:02:20.795 --> 00:02:26.274 industry's success is largely dependent on raw materials imported from China. 00:02:26.554 --> 00:02:30.364 Despite heavy restrictions on Chinese investments following a border standoff 00:02:30.364 --> 00:02:35.355 in 2020, India has continued to allow the import of industrial goods from China. 00:02:35.734 --> 00:02:38.725 More recently, the Modi government indicated it may consider 00:02:38.725 --> 00:02:39.934 allowing Chinese investment. 00:02:40.355 --> 00:02:44.385 to boost the sector, a development welcomed by industry players. 00:02:44.725 --> 00:02:47.475 Economies of scale has always been a challenge. 00:02:48.265 --> 00:02:52.905 Uh, we would love to be able to import more materials from China 00:02:52.905 --> 00:02:58.029 more easily for, to help us meet the global requirements that we have. 00:02:58.450 --> 00:03:02.780 India's push to become a global manufacturing hub is why Modi's first 00:03:02.790 --> 00:03:07.410 budget of his third term saw cuts on custom duties to make the import 00:03:07.419 --> 00:03:09.450 of certain raw materials cheaper. 00:03:09.660 --> 00:03:13.789 There were also incentives for factories to hire more workers and more 00:03:13.789 --> 00:03:16.399 dormitories to support a labor expansion. 00:03:16.690 --> 00:03:20.850 For years now, Modi has struggled to tackle record unemployment levels. 00:03:21.184 --> 00:03:25.954 And a robust manufacturing sector, which now employs 11 percent of the workforce, 00:03:26.154 --> 00:03:28.244 could help add millions of jobs. 00:03:28.904 --> 00:03:33.684 Experts say India's manufacturing goals can best be achieved if the pivot of 00:03:33.684 --> 00:03:36.374 supply lines to India is more permanent. 00:03:36.855 --> 00:03:41.515 We have to look into developing an ecosystem where parts and components 00:03:41.515 --> 00:03:43.685 are also manufactured into the country. 00:03:43.954 --> 00:03:47.945 Today, most of the large companies are procuring from India. 00:03:47.945 --> 00:03:51.164 They have not set up their base in India because once they are settled 00:03:51.164 --> 00:03:55.484 in India, probably they will help us in developing an ecosystem for that. 00:03:55.954 --> 00:04:00.014 India's mobile manufacturing industry is one such success story. 00:04:00.474 --> 00:04:04.950 As of this year, India's mobile phones are made locally while 30 00:04:04.950 --> 00:04:06.829 percent of output is exported. 00:04:07.230 --> 00:04:11.320 Experts say Apple moving part of its production line from China to India 00:04:11.369 --> 00:04:13.109 was partly responsible for that. 00:04:13.420 --> 00:04:16.550 This brought ancillary players that make cameras and phone 00:04:16.550 --> 00:04:18.529 components to the country as well. 00:04:18.889 --> 00:04:23.790 Analysts say if India can convince western companies to move entire production lines 00:04:23.790 --> 00:04:28.740 here, that's when it can truly claim to be a global manufacturing powerhouse. 00:04:29.340 --> 00:04:33.520 and transform its Make in India scheme to Made in India. 00:04:34.080 --> 00:04:36.330 Neha Punia, CNA, New Delhi.