Trouble for toy sector? Trump’s tariffs hit US orders by 50%; here’s how Indian exporters are fighting the impact

Toy exporters, who began the financial year with strong dispatches due to early festive shipments and advance buying from US customers, are now having to cut prices and change packaging to cope with the slowdown. The slump comes after American buyers shifted to other sourcing markets following the United States’ decision to impose a 50% tariff on Indian toys.

Amitabh Kharbanda, governing body member of the Toy Association of India, said the usual cycle has been disrupted. “Toy orders from the US for the next festive season, which we usually receive by October-November, are down by 50% this year as customers are shifting to China or other countries,” he told ET. Most festive, carnival and entertainment articles are shipped between April and August for the US holiday season. Exports to the US, India’s largest destination for these goods, touched $64.5 million in this period, amounting to 78% of the total shipments worth $82.3 million recorded in the whole of 2024–25. Between April and August this year, India’s exports of festive, carnival and other entertainment items rose 4% year-on-year to $101.9 million. Overall exports of toys, games and sports requisites grew 8.9% to $302.6 million, up from $277.8 million in the same period last year. The US first imposed a 25% tariff on Indian toys from August 1 and doubled it later in the month, citing India’s continued imports of Russian crude oil. “Toy shipments for the US festive season typically begin in April. Following the 145% tariff on Chinese toys, customers front-loaded their orders, resulting in strong volumes in the first half of the year. However, the subsequent 50% tariff on Indian imports slowed new orders in the latter half,” said KA Shabir, CEO of Funskool India. He further told ET that early buying helped cushion the impact and the company still expects to finish the year with marginal single-digit growth.Manufacturers are now trying to cushion the higher tariff-related costs by scaling back features, simplifying packaging and producing smaller units. According to Kharbanda, these adjustments have become necessary as buyers push for price cuts. A Delhi-based exporter said, “We have had to make some changes in the toys because clients are asking for additional discounts and the absence of that may lead to business moving to Vietnam.”