The Indian toy manufacturing industry is witnessing a remarkable resurgence, poised to become a global force thanks to shifting geopolitical dynamics, strategic government interventions, and the sector’s growing export potential. As the US-China trade war deepens—with Washington slapping a steep 145% tariff on toy imports from China—India finds itself at a golden inflection point. Once an import-dependent market, the Indian toy sector is fast evolving into a credible and competitive global supplier, attracting new orders, international interest, and significant domestic policy support.

Current Stage of the Indian Toy Industry

India’s toy industry has evolved substantially over the past decade. From being heavily reliant on Chinese imports, the country has started establishing a robust domestic manufacturing base. According to Toy Association of India data, India’s toy exports grew from USD 40 million in FY15 to approximately USD 152 million in FY24. Simultaneously, toy imports from China have plunged from USD 235 million in FY20 to just USD 41 million in FY24—showcasing a dramatic shift in supply chain dynamics.

Indian manufacturers are now scaling up production, supported by favorable policies, quality norms, and increasing global demand. Prominent industry leaders like Playgro Toys and Sunlord Group have confirmed ongoing capacity expansions and strategic partnerships with international players in soft and wooden toys.

Global Trade Shifts: An Opportunity for India

The 145% US tariff on Chinese toy imports, part of a broader trade war strategy, is projected to dramatically reduce China's share in the US toy market, which was previously around 77%. With Vietnam facing a 46% tariff, Bangladesh 37%, and Indonesia 32%, India—with a comparatively lower 26% additional duty—is now in a favorable position to emerge as a key alternative supplier.

India’s strategic advantage lies not only in tariffs but also in its ability to manufacture competitively priced, high-quality toys. The US toy market, valued at approximately USD 41.7 billion, represents a massive growth opportunity for Indian exporters looking to scale operations globally.

Orders in Pipeline and New Market Exploration

Indian toy manufacturers are already seeing a spike in inquiries and export orders, particularly from the US and Europe. Exporters are tapping into markets like the Middle East, South America, and Africa, beyond traditional buyers.

Manu Gupta, CEO of Playgro Toys, revealed that global toy brands are actively exploring manufacturing partnerships and joint ventures in India. Notably, many of these foreign players are looking to shift production from China and Vietnam to India to mitigate tariff risks and diversify supply chains.

Key Competitors and Leading Listed Players in India

India is now up against well-established competitors such as Vietnam and Thailand in the global toy manufacturing space. However, the competitive edge is shifting due to tariffs and India’s rising production capabilities.

Among the key domestic players leading the charge:

• Funskool India Ltd (a joint venture between MRF and Hasbro) – A dominant force in the Indian toy market with a growing export presence.
• Reliance Brands – Through its acquisition of Hamleys, Reliance is setting up manufacturing partnerships in India, strengthening its vertical integration from production to retail.
• Playgro Toys India – A major manufacturer with a growing global footprint and capacity expansion plans.
• Sunlord Toys – A leader in the soft toy and electronic toy space, with a sharp focus on exports.

Additionally, listed companies such as Imagicaaworld Entertainment Ltd and MRF Ltd (via Funskool) provide indirect exposure to the toy market for retail investors.

Government Support and Policy Backing

The Indian government has played a pivotal role in enabling this transformation. Key initiatives and policy actions include:

• National Action Plan for Toys – Announced in recent Union Budgets, aimed at streamlining production clusters, improving R&D, and promoting exports.
• Mandatory BIS Quality Standards – Enforced since 2020 to curb the influx of cheap and hazardous imports, particularly from China.
• PLI Scheme for Toys (under MSME sector) – Offers financial incentives for manufacturers investing in capacity enhancement.
• State-led Initiatives – States like Madhya Pradesh, Karnataka, Bihar, and West Bengal are formulating toy-specific industrial policies to attract investments and create toy clusters.

Despite this progress, industry leaders like Akshay Binjrajka have stressed the need for stronger port checks and BIS enforcement to prevent substandard Chinese toys from entering the market.

Future Strategy: Scaling Up for Global Leadership

India’s toy sector now needs to shift gears from policy-enabled growth to market-driven global leadership. The future strategy revolves around several pillars:

1. Capacity Expansion: Domestic companies are scaling production units and upgrading facilities to meet international safety and quality standards.
2. Joint Ventures with Global Players: Collaborations with major brands will help Indian firms integrate into global supply chains and adopt advanced technology.
3. Focus on Innovation & Design: The “Make in India” initiative now includes “Create in India,” encouraging original design manufacturing (ODM) over contract manufacturing.
4. Targeted Export Strategy: With high tariffs hitting regional competitors, Indian firms can carve out niche segments such as educational toys, eco-friendly wooden toys, and soft toys.
5. Skill Development & Employment: With toys being part of the MSME ecosystem, the sector has huge employment potential—especially in rural clusters. Skill training and vocational courses will ensure quality labor availability.
6. Trade Agreements: Early conclusion of a bilateral trade deal with the US can solidify India’s long-term position as a preferred export destination.

Conclusion: India’s Golden Moment in Toy Manufacturing

With rising global demand, advantageous trade dynamics, and proactive domestic policies, the Indian toy industry is poised for exponential growth. From being a net importer a decade ago, India is now on the cusp of becoming a global export hub. The current trade war between the US and China has inadvertently opened the doors for India to reimagine its place in the global toy value chain.

As long as manufacturers continue to scale up responsibly, and the government strengthens its commitment to quality control and infrastructure, the dream of making India the “Toy Factory of the World” is no longer far-fetched—it is within grasp.