New Delhi |
India’s dream of becoming a global toy manufacturing hub is facing a surprising roadblock — the kind that lights up when kids ride it.
Motion-powered scooters, a popular toy category, are currently taxed at 18% GST if they have lights, but only 12% GST if they don’t. And now, the Commerce Ministry is considering a GST rationalization to address this inconsistency.
🧸 Same Toy, More Tax?

At the heart of the issue are non-motorized “mobility scooters” for kids — whether standing or sitting. Even though these scooters with lights don’t use batteries or electronics (they use magnets to power lights through motion), they fall under a higher GST slab simply because of their added visual features.
“This makes little sense,” said Rajeev Batra, Treasurer of the Toys Association of India. “These aren’t electronics, yet the tax jumps from 12% to 18% for a ₹20 lighting add-on. This hurts local manufacturers.”
India’s Toy Push and Trade Momentum
India’s toy exports have grown 13.5% year-on-year, rising from ₹1,260 crore to ₹1,430 crore between FY2023–24 and FY2024–25, according to Commerce Ministry data. This momentum comes as India is closing trade deals with the UK, US, and EU, and preparing to launch a dedicated policy for toy production, announced by Commerce Minister Piyush Goyal.
Goyal stated that the upcoming scheme would enhance design, quality, branding, and packaging, targeting 4,000+ MSME units in India’s fragmented toy industry — many located in NCR, Maharashtra, Karnataka, and Tamil Nadu.
🎯 What the Industry Wants
Manufacturers say the current GST policy discourages innovation, even when enhancements are non-electronic and cost-effective. Vivek Singhal, CEO of B2B toy company Bidso, said,
“This anomaly stifles creativity and makes engaging, educational toys less accessible to Indian children.”
The Commerce Ministry is reportedly in talks with stakeholders and may forward a recommendation to the GST Council soon.
🌍 Big Market, Bigger Opportunity
The global toy market is expected to reach $179.4 billion by 2032, as per a February 2025 PNB report. Indian exports are now reaching 153 countries, but unlocking full potential may depend on GST rationalization, export incentives, and targeted policy support.
As India builds its reputation as a toy exporter, smart regulation could turn light-up scooters from a tax headache into a global success story.