Uttar Pradesh Toy Manufacturing Promotion Policy-2025

1. Key Policy Highlights

Uttar Pradesh has over 230 export-oriented Micro, Small and Medium Enterprises (MSMEs) and a consumer market of around 200 million.
Traditional toy-making clusters are present in Jhansi (soft toys), Varanasi (wooden toys) and Gorakhpur (terracotta). Noida is also emerging as a location for toy-based manufacturing.
Uttar Pradesh contributes nearly 50% of India’s festive article (HS 9505) exports.
The YEIDA Toy Park and a cluster-based approach are among the initiatives cited for supporting toy manufacturing in the state.
The policy aims to create employment, provide alternatives to imports and promote exports of toys manufactured in Uttar Pradesh.
The policy applies across the entire geographical area of Uttar Pradesh.

2. Policy Objectives

Promote and establish toy manufacturing units and Anchor Projects.
Attract investment in toy manufacturing zones and encourage supporting industries related to toy manufacturing.
Increase employment opportunities and entrepreneurship in the state.
Encourage innovation and the use of emerging technologies, while developing infrastructure and support systems for toy manufacturing.
Promote sustainable and inclusive development with environmental conservation, and strengthen the Atmanirbhar Bharat initiative.

3. Eligibility and Toy Categories Covered

The policy provides for incentives to Toy Manufacturing Units categorised as Micro, Small, Medium, Large and above, as well as Toy Cluster Enterprises. The policy lists the following indicative toy categories:

Dolls and soft toys.
Electronic and battery-operated toys, including Augmented Reality (AR) and Virtual Reality (VR) toys.
STEM toys, interactive plush toys, puzzles and brain-teaser toys.
Mechanical toys and ride-on toys.
Traditional toys made of wood and terracotta.

For the Large and above category, the policy specifies Fixed Capital Investment above ₹125 crore and turnover above ₹250 crore.

4. Key Incentives and Benefits

The financial incentives below are listed in Section 8.1 for Large and above category toy manufacturing units. The applicable benefit varies by location and is subject to the conditions stated in the policy.

Capital Subsidy

Gautam Buddha Nagar and Ghaziabad: 10% capital subsidy on plant and machinery, up to ₹20 crore.
Rest of Uttar Pradesh, excluding Gautam Buddha Nagar and Ghaziabad: 30% capital subsidy on plant and machinery, up to ₹35 crore.
The capital subsidy is provided in three equal instalments after commencement of commercial production.

Stamp Duty and Land-Use Conversion Fee

0% stamp duty exemption in Gautam Buddha Nagar and Ghaziabad, and 100% stamp duty exemption on purchase or lease of land in the rest of Uttar Pradesh.
For leased land, the minimum lease period must extend three years beyond the maximum admissible incentive period.
A 100% exemption on the Land Use Conversion Fee is provided for establishing toy manufacturing and supporting units.

Patent Registration and R&D Support

Domestic patents: reimbursement of 75% of actual filing cost, up to ₹5 lakh.
International patents: one-time capital subsidy of up to ₹10 lakh.
Private-sector R&D and design laboratories are encouraged to improve quality and testing standards, develop prototypes and support a centralised toy-testing system.

Electricity Duty and Power Tariff Subsidy

Electricity Duty exemption for 10 years for toy manufacturing units established in the state.
Power tariff subsidy of ₹2 per unit for five years after commencement of commercial production, on electricity purchased from a licensee utility, subject to a maximum of ₹60 lakh per unit per year.
Power consumed from a unit’s own captive power plant or electricity purchased through open access is not eligible for the Power Tariff Subsidy.

EPF Reimbursement

100% reimbursement of the total Employees’ Provident Fund (EPF) amount paid for employment of Uttar Pradesh-domiciled professionals for a minimum continuous period of one year after commencement of commercial production.
The reimbursement is capped at ₹1,000 per employee per month and ₹5 crore per unit.

Marketing Promotion Subsidy

75% reimbursement of stall charges for participation in fairs and exhibitions: up to ₹50,000 for each fair held in India and up to ₹2 lakh for each fair held outside India.

Quality, Testing and Certification Support

The policy further provides reimbursement against expenditure incurred on export audits or equivalent testing: ₹1 lakh per unit per year in Gautam Buddha Nagar and Ghaziabad, and ₹1.5 lakh per unit per year in the rest of Uttar Pradesh.

Note: No unit shall receive financial incentives exceeding 100% of its total Fixed Capital Investment, except for the specific additional provision for qualifying bioplastic/biodegradable-toy units.

5. Special Incentives for Anchor Projects

An Anchor Project is defined as a toy manufacturing project with minimum Fixed Capital Investment of ₹150 crore and at least one of the following conditions:

Employment of 20 persons for every ₹1 crore of investment; or
A joint venture with a foreign toy manufacturing company.

For Anchor Units receiving land allotted by an Industrial Development Authority, the policy provides the following front-end land subsidy over and above the admissible package for Large and above category units:

Paschimanchal, excluding Gautam Buddha Nagar and Ghaziabad: 20% land subsidy.
Madhyanchal: 30% land subsidy.
Bundelkhand and Purvanchal: 40% land subsidy.

The recipient must furnish a Bank Guarantee equal to the front-end land subsidy. The guarantee is valid for four years or until commencement of commercial operations, whichever is earlier. Ancillary units under an Anchor Project are eligible for incentives under Clause 8.1.

6. Additional Incentives for Bioplastic and Biodegradable Toys

New, expansion or diversified toy manufacturing units producing 100% of their toys using biodegradable plastic or bioplastic are eligible for the additional incentive provided under Clauses 8.1 and 8.2, with an overall increase of 10% over the 100% limit of Fixed Capital Investment.

7. Cluster Development, Market Access and Implementation

Cluster Development

Toy manufacturing units will be developed under a cluster approach.
Common infrastructure, including tool rooms, testing laboratories and other necessary services, will be made available in cluster areas through private entities in the form of individual units. Applicable incentives under the policy will be provided.

Marketing and Market Access

The MSME Department will prepare a marketing and branding strategy for the policy and related schemes and incentives under a common identity.
The policy provides for collaboration with FICCI, PHDCCI and CII, including roadshows, seminars and workshops, and promotion through print, electronic and social media.
The state will promote participation in national and international toy fairs and exhibitions.
The government will support businesses in joining GeM, ONDC and other e-commerce platforms through information, education and communication activities and institutional tie-ups.

Implementation and Validity

The Department of Micro, Small and Medium Enterprises, Government of Uttar Pradesh, will manage implementation of the policy.
The policy is effective for five years from the date of issuance of the government order. The policy also provides for review or amendment during implementation.
New units and eligible expansion/diversification projects in the Large and above category may avail the incentives under Clauses 8.1, 8.2 and 8.3. Existing toy units are also to be provided financial incentives for technological upgradation.