Indian toy shipments lose momentum as amid US tariff spike
India’s toy exporters, who saw a surge in orders early in the financial year, are now confronting an abrupt slowdown following the United States’ decision to impose sharply higher tariffs on Indian toy imports, The Economic Times reported.
The new duty regime, which raised tariffs from 25% to 50%, has significantly altered buying patterns among American importers, who are now evaluating alternative sourcing destinations to offset rising costs.
- Industry members report that orders for the next festival cycle have fallen by almost half
- Amitabh Kharbanda of the Toy Association of India notes that purchase commitments typically placed between October and November have shrunk drastically, creating uncertainty for manufacturers who rely heavily on seasonal demand from the US market
Despite these challenges, India’s exports of festive and entertainment articles showed moderate growth in April–August, reaching $101.9 million—up 4% year-on-year. The broader category of toys, games and sporting goods also recorded an 8.9% rise, totaling $302.6 million. Much of this early momentum resulted from “front-loaded” buying by US clients who anticipated higher tariffs on Chinese toys and shifted their sourcing temporarily to India.
Funskool India CEO K.A. Shabir explained that US buyers accelerated orders beginning in April, expecting disruptions in global supply chains. However, once Washington extended steep tariffs to Indian products from late August, new orders slowed dramatically. Shabir believes the year may still close with low single-digit growth but warns that exporters must adapt rapidly to remain competitive.
Manufacturers are now cutting costs by simplifying packaging, reducing product features, scaling down toy sizes and offering deeper discounts to hold market share. A Delhi-based exporter said many buyers have warned that price flexibility will determine whether procurement continues from India or moves to Vietnam and other emerging hubs.
The US remains India’s most important market for seasonal and carnival-related articles, accounting for nearly 78% of last year’s exports in this segment by August alone. But rising protectionism and shifting supply dynamics mean Indian exporters must innovate to retain their foothold.
The tariff escalation, linked by Washington to India’s purchase of Russian crude, further complicates trade relations. For now, exporters face a dual challenge: navigating shrinking margins while safeguarding long-term customer relationships in a market undergoing rapid realignment.
