Indian toy exporters are facing a sharp downturn in order volumes from the U.S., with orders reported to be down by about 50% this year.
This slump comes after the United States Customs and Border Protection and U.S. policy introduced much higher tariffs on Indian goods, making Indian exports less competitive in the U.S. market
Why This Matters
- The U.S. is a top market for Indian toy exporters, meaning a 50% drop in orders represents a major blow.
- Toys are typically low-margin, high-volume items — large cost hikes (via tariffs) squeeze margins significantly.
- With U.S. buyers shifting to alternative sourcing countries (like Vietnam and China) due to tariffs, Indian suppliers risk losing long-term business relationships.
- The timing is significant: many U.S. orders target festive season shipments, and delays or cancellations now disrupt production and inventory cycles in India.
Key Details & Numbers
- A governing-body member of the Toy Association of India says orders from the U.S. for next-season shipments are down by 50%.
- From April–August this fiscal year, Indian exports of festive/carnival entertainment articles to the U.S. stood at US$64.5 million, which is about 78% of what was shipped to the U.S. in the whole of 2024-25 in that category.
- Overall, India’s toy/game/sports requisites’ exports rose ~8.9% in April–August vs the year before, but that uptick is misleading as U.S. orders are falling sharply — growth is driven by other markets.
What’s Driving the Drop
- The U.S. raised tariffs on Indian exports up to 50% (from an earlier 25%) effective late August 2025.
- Because of this cost increase and the risk of losing competitiveness, U.S. buyers are shifting sourcing to other countries with lower tariffs.
- Indian toy exporters are attempting adjustments: simplifying packaging, reducing features/cost content, offering bigger discounts — but these have limits.
Implications & Risks
- Revenue hit: For many Indian toy manufacturers heavily reliant on U.S. market, this could lead to lower sales, tighter cash flows, and pressure on profitability.
- Supply-chain shifts: Sourcing may move permanently away from India if buyers establish relationships elsewhere, leading to loss of market share.
- Employment and manufacturing: Toy manufacturing employs a large number of workers (including in smaller units); order loss could translate to job losses or cut-backs.
- Need for diversification: Indian exporters must find alternative markets beyond the U.S. to compensate for the shortfall.
- Policy pressure: Exporters are likely to push the Indian government for relief, incentives, or trade negotiations to help offset the damage. ThePrint
What to Watch
- Whether Indian toy exporters succeed in redirecting shipments to other geographies (Europe, Middle East, Australia) and how fast.
- Whether the Indian government introduces export-support measures specific to toys (subsidies, incentives, tariff relief, market access).
- Whether U.S.–India trade negotiations lead to a reduction or waiver of the 50% tariffs that are hitting toy exports.
- How Indian toy manufacturers adjust product design, cost structures and supply-chains to remain competitive despite higher tariffs.
- The impact on employment and regional manufacturing hubs in India that cater to toy export production.
Conclusion
The news that Indian toy export orders from the U.S. are down by 50% amid escalating U.S. tariffs represents a serious head-wind for the Indian toy manufacturing and export ecosystem. While overall toy exports from India still show some growth, the sharp drop in the key U.S. market signals structural shifts and risks. How Indian exporters and the government respond now will determine whether this is a temporary setback or a more lasting competitiveness challenge.
