For generations, toys have played an integral role in childhood development, shaping imagination and cognitive skills. Be it Barbie, LEGO, UNO, or Hot Wheels, these playthings have transcended mere amusement to become tools of learning and creativity.
According to market research firm Statista, India’s toys and games sector is poised for significant growth, projected to generate $1.8 billion in revenue by 2025, with a compound annual growth rate of 4.69% from 2025 to 2029. The surge is driven by rising disposable incomes and an increasing preference for educational and sustainable toys.
“India’s toy market is undergoing a remarkable expansion,” said Krishna Iyer, Director of Marketing at MullenLowe Lintas Group, in an interview with Storyboard18. Valued at $1.5 billion in 2022, the industry is on track to double, reaching an estimated $3 billion by 2028.
“Gone are the days when toys were purely for entertainment. Today, they are seen as vital tools for cognitive development,” Iyer noted. “From coding kits to DIY robotics and interactive science experiments, parents increasingly seek playthings that foster critical thinking and creativity.”
Several key trends are driving this shift. The demand for educational and STEM-based toys is on the rise, as parents and educators look for products that promote science, technology, engineering, arts, and mathematics (STEAM) skills. Additionally, the market has witnessed growing interest in eco-friendly toys and character-based merchandise linked to popular movies, television series, and books, further fueling sales.
Recognizing the industry’s potential, the Indian government has launched initiatives to bolster toy manufacturing, including establishing production clusters aimed at fostering innovation and sustainability. While India’s toy market continues its steady ascent, the United States remains the global leader, with projected toy sales of $41.7 billion in 2025.
Recent policy changes have also reshaped the industry. Government regulations such as the Quality Control Order (QCO) and increased import tariffs have benefited domestic manufacturers. Toy imports have declined by 52%, while exports have surged by 239%, highlighting India’s ambitions to emerge as a key player in global toy production.
Despite these gains, India currently accounts for just 0.5% to 1% of the global toy market. However, with an estimated 250 million children under the age of 14, the potential for expansion remains vast.
“While global giants still dominate, India is making notable strides, particularly in board games,” said Philip Royappan, General Manager of Marketing at Funskool. “Challenges persist, including dependence on imported electronic components and a shortage of skilled toy designers.”
Industry analysts acknowledge that Indian manufacturers face stiff competition from established brands like LEGO, Mattel, and Hasbro. “These companies enjoy decades of brand recognition,” said N. Chandramouli, CEO of TRA Research. “LEGO, for instance, saw a 13% revenue increase in 2024, despite a global industry slowdown. Indian toy makers must scale up, strengthen brand identity, and invest more in research and development to compete effectively.”
The rise of e-commerce has transformed toy retailing in India, with digital platforms driving a surge in online sales. Quick commerce services have emerged as a key force behind impulse purchases.
“Our omnichannel strategy ensures that consumers can discover and purchase our products seamlessly,” said Nilay Verma, Country Head of Hasbro India. “While traditional mom-and-pop stores remain influential in Tier 2 and Tier 3 cities, e-commerce is crucial for marketing and brand engagement. Quick commerce, in particular, is becoming an important avenue for impulse buys and gifting.”
Funskool has seen e-commerce contribute to 40% of its revenue, with nearly half of that derived from quick commerce platforms. “Retail sales, including both independent stores and modern retail formats, make up the remaining share,” Royappan said.
Marketing strategies are also evolving to meet changing consumer behaviors. Toy brands are increasingly prioritizing digital engagement over traditional advertising.
“Our approach is to connect with consumers across multiple touchpoints,” Verma explained. “While television advertising remains important for major franchises, digital platforms like YouTube, Facebook, and Instagram are becoming indispensable for reaching parents and young audiences alike.”
Funskool, while declining to disclose specific advertising budgets, confirmed that it allocates spending based on category-specific consumer behavior. “For games, children’s television channels remain a priority, while categories like infant and preschool toys target parents via general entertainment television and digital platforms,” the company stated.
As India’s toy industry continues to expand, manufacturers and retailers alike are adapting to a rapidly evolving market—one where playtime is increasingly intertwined with learning, sustainability, and digital transformation.