With its proven manufacturing capabilities spanning diverse sectors such as automobiles, electronics, engineering, and textiles, the state is laying a strong foundation for the toy industry. The state industries dept has launched its maiden toy manufacturing policy to tap into the global toy market, which was valued at $180 billion in 2024 and is expected to grow by 47% to reach an estimated $265 billion by 2028.Currently, India’s market share in this sector is less than 1%, valued at $1.7 billion, the Tamil Nadu Toy Manufacturing Policy 2025 unveiled in Dec 2025 said. The policy looks to attract at least 10 anchor players, establish a dedicated toy manufacturing park, attract leading design entities to set up their creative studios, and promote traditional toy clusters in the state to make them globally competitive. It aims to position the state as a global hub for the design, development, and manufacturing of new-age toys, while championing the global recognition of TN’s traditional toy heritage.The policy emphasises harnessing the state’s strong manufacturing ecosystem to drive innovation in toy design, development, and production, while supporting toy manufacturing to promote experiential learning and toys for children with special needs. It also focuses on the promotion of creative design studios and provides financial assistance to support the acquisition of GI tags for traditional toys. The policy underlines that proximity to textile hubs fosters opportunities for collaboration and innovation in textile-based toys, it adds that this synergy makes Tamil Nadu a hub for manufacturing world-class toys that appeal to both domestic and global markets.The policy has positioned the toy manufacturing industry as a sunrise sector, offering special incentives and packages. Globally, the major segments in the toy sector include activity and ride-on, educational, infant and preschool, games and puzzles, plush, dolls, and electronic and remote-controlled toys. The state has the potential to attract local and global toy makers to establish high-end toy manufacturing, including electromechanical toys, it noted.Historically, the state has a rich heritage of toy-making and traditional games that dates back several centuries. The state has made inroads into modern toys with Funskool India, the country’s leading toy manufacturing company promoted by MRF Group, making toys from its facility in Ranipet.Despite more than 25% of the population being under 14, offering a substantial and growing market for the domestic industry, imported toys had flooded the market until a few years ago. However, imports declined by 52% between FY15 and FY23, and exports rose by 239%, thanks to curbs on toy imports. Basic customs duty (BCD) on toys was increased from 20% to 60% in 2020, and then to 70% in 2023, while the quality control order (QCO) for toys was mandated from 2021. The introduction of BIS standards has played a role in curbing the influx of imported toys, particularly from China, boosting domestic manufacturing. It has encouraged organised players to invest in local production and build stronger supply chains within India. Against this backdrop, the state’s toy policy will open a window to make Tamil Nadu a hub for yet another manufacturing sector for the world.As far as toy production is concerned, plastics and packaging form a significant share of costs. ABS (Acrylonitrile Butadiene Styrene) and PP (Polypropylene), PVC and polyethylene (PE) are the key raw materials used in the production lines in the toy industry.An official from the industries dept said the policy addresses the important issue of providing incentives for toy manufacturing, which were not available in the past. “Toys imported from China used to flood the market. Now, there are restrictions on imports, and this opens up opportunities for the sector,” the official said.K A Shabir, CEO, Funskool, said the policy is a great initiative. “The policy has the potential to drive the growth of toy manufacturing in TN by encouraging investments, employment generation, and export-led manufacturing. These objectives are well aligned with what Funskool has been doing over the last several years,” he said.Chennai-headquartered Veva Toys Global, which manufactures Popsugar, Frendo, Race N Roll and Veva Toys brands, has a portfolio comprising remote-control cars, die-cast cars, and plastic toys. Having commenced manufacturing at its facility on the outskirts of the city three and a half years ago, it produced about 25 lakh toys in FY26. It employs about 1,100 people, of whom 95% are women from villages around Redhills in Tiruvallur district.Vishal Nahar, MD, Veva Toys Global, said Tamil Nadu has made a strong start with the toy manufacturing policy. “Creating dedicated toy clusters with plug-and-play infra and simplifying approvals will make it easier for more players to enter the industry. Focused skill development in design and manufacturing, along with support for innovation and exports, can further strengthen the ecosystem and help position TN as a competitive global hub,” he said.Pointing out that toy manufacturing is largely labour-intensive and provides opportunities for first-time workers, especially women, he said having a more tailored framework for workforce guidelines could further support the sector. “This would bring more clarity for industry players while also encouraging inclusive employment and skill development at scale,” Nahar added. The company is gearing up to export its products to Australia, the UAE, and South America in the coming months.Saravana Bhava, COO, Rig Wheels Toys, a manufacturer of Vande Bharat Express toy trains with a production unit in Madurai, observed that the policy will not only increase manufacturing but also accelerate R&D in the toy sector in Tamil Nadu. “Our talent pool will play a major role in R&D for toys, akin to Tamil Nadu’s automobile and electronics manufacturing sectors and their aligned R&D presence in the state,” he said.Chozha Naachiar Rajasekar, president, The Tamil Chamber of Commerce, said the policy is expected to significantly reduce future imports of toys from China. “There is potential to capture a larger share of the toy market and enhance exports. The policy focuses on innovation, safety, quality, and the production of eco-friendly toys. The industry should utilise the policy to establish strong brand value for toy manufacturing in Tamil Nadu,” he said.
