Union Budget 2025 outlines India's toy story; envisions global toy hub

Finance Minister Nirmala Sitharaman today announced a comprehensive plan to establish India as a global hub for toy manufacturing.

This initiative builds on the National Action Plan for Toys and focuses on developing manufacturing clusters, enhancing skill development, and creating a sustainable ecosystem for high-quality, innovative, and eco-friendly toy production, all aligned with the ‘Made in India’ brand.

As of 2025, India manufactures 88% of its toys domestically, with imports making up 12% of the market. Of these imports, 62% come from China—a significant drop from previous years—according to an IIM Lucknow case study, "Success Story of Made in India Toys," commissioned by DPIIT.

BIS (Bureau of Indian Standards) granted 1,454 licenses to domestic and 36 to foreign manufacturers last year for the safety of toys, as reported by Market Brew by Tata Fintech.

“The Union Budget 2025-26 provides a crucial boost for MSMEs, digital commerce, and domestic consumption, especially for sectors such as toys. The increase in investment and turnover limits for MSMEs will drive scale, innovation, and job creation. The enhanced support for sectors like toys will not only improve domestic manufacturing capabilities but also enhance exports. We believe these reforms will empower small businesses and entrepreneurs in the long run,” Dhiresh Bansal, Chief Financial Officer at Meesho, said.

The Indian toy market is projected to reach $4.4 billion by 2032, with a CAGR of 10.6% from 2024-2032, according to IMARC. The government's efforts aim to reduce the country's reliance on imports while meeting the increasing demand for both educational and recreational toys domestically.

Harish Gadgin, Co-founder and Chief Product Officer at ToToys AI, emphasized that the Union Budget's push for domestic toy manufacturing is a significant step toward fostering innovation and entrepreneurship. He noted that by reducing dependence on imports, this initiative will make toys more affordable and accessible for Indian consumers.

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"Furthermore, producing educational toys domestically will help enhance STEM education and equip children with essential skills such as creativity and critical thinking. The establishment of toy manufacturing hubs will also support India’s export potential, positioning the country as a global leader in the toy industry,” he said.

The country’s major toy manufacturing hubs include Madhya Pradesh, Gujarat, Delhi, Tamil Nadu, and Chhattisgarh, according to Eximpedia. Key cities contributing significantly to toy production are Bengaluru, Chennai, and Mumbai.

Arpit Mehrotra, Managing Director of Office Services at Colliers India, emphasised the long-term advantages of the government's strategy, stating that India's efforts to establish itself as a global toy manufacturing hub will bolster manufacturing clusters and promote skill development. "By creating an ecosystem focused on high-quality, sustainable, and innovative toy production, the ‘Made in India’ brand will be significantly reinforced," he added.