India Eyes Bigger Share Of US Toy Market As Rivals China, Vietnam Face Up To 54% Tariff

The Indian toy industry is ready to take advantage of the high tariffs imposed by the US on competitors such as China and Vietnam, and domestic players have already begun work on expanding capacity and forming joint ventures with global firms, exporters said on Sunday.

They added that India has emerged as a winner in the recent US tariff hikes, as exporters are better positioned to absorb the impact compared to competitor countries that are facing higher import duties in America.

While the US has imposed an additional 26% import duty on India, its competitor Vietnam is facing a 46% tariff, Bangladesh 37%, China 54%, Indonesia 32%, and Thailand 36%.

"Huge opportunities are there for our exporters now. Vietnam's exports are about $6 billion and China's are $80 billion. Now their items will face higher duties in the US than that of Indian toys. All big toy firms are exploring opportunities to set up plants in India," the CEO of Playgro Toys India, Manu Gupta, said.

India's toy exports are hovering in the range of $326 million to $348 million for the last three years, according to the industry.

He said that early conclusion of a bilateral trade agreement with the US will also help Indian toy players to increase shipments.

Gupta said that along with the Centre, now states too are making sector-specific policies to attract investments.

"States like Madhya Pradesh, Karnataka, Odisha, Haryana and Bihar are coming forward with their policies for us," he said, adding top wooden and soft toy global firms are joining hands with domestic players for manufacturing.

Sharing similar views, Amitabh Kharbanda, Promoter of Sunlord Group, said the Budget announcement for a National Action Plan for Toys will further help the sector.

"The sector can benefit from the higher duties on its competitors. The trade agreement with the US will also help us in a huge way," Kharbanda said.

However, he said that Indian companies should look at aggressively expanding their capacities to increase shipments.

The government's steps, such as mandatory quality norms and an increase in customs duties, have significantly helped domestic toy players boost manufacturing and reduce dependence on Chinese imports.

The industry has long faced challenges in the global trade landscape, consistently being a net importer of toys for many years.

For over a decade, India relied heavily on China for around 76% of its toy imports.

India's import bill for toys from China dropped from $214 million in fiscal 2013 to $41.6 million in fiscal 2024, leading to a decline in China's share in India's toy imports from 94% in fiscal 2013 to 64% in fiscal 2024, indicating India's competitiveness in the international toy market.