Indian toy exporters are facing a sharp decline in orders from the United States following the imposition of higher tariffs, with many reporting a fall of nearly 50 percent in new bookings for the festive season. The increased duty, which Washington raised from 25 percent to 50 percent in August, has forced exporters to slash prices, reduce features, and simplify packaging to remain competitive against lower-cost markets such as Vietnam and Indonesia.

According to The Economic Times, the US—India’s largest market for toys, games, and entertainment articles—has become significantly less lucrative after the tariff change, which was linked to India’s continued crude oil trade with Russia. Industry data shows that exports of toy and festival articles touched 64.5 million dollars between April and August, representing nearly 78 percent of last year's full-year total. However, industry insiders say the momentum has since slowed considerably, especially for orders typically placed in the October–November cycle.

Amitabh Kharbanda, a governing body member of the Toy Association of India, said that order volumes are down by almost half this year. “The bookings that usually arrive in the October-November quarter have dropped sharply,” he noted. Funskool India CEO KA Shabir added that most US buyers placed advance orders early in the year when tariffs on Chinese toys were still high, leading to a strong start for exporters in the first quarter. However, the situation changed dramatically after the US increased duties on Indian toys, leaving businesses scrambling to adjust.

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Despite the slowdown in the latter half of the fiscal year, April–August shipments still showed moderate year-on-year growth. Exports of festive and entertainment articles rose 4 percent to 101.9 million dollars, while overall shipments of toys, games, and sports goods grew 8.9 percent to 302.6 million dollars. Industry experts attribute this early growth to front-loaded buying before tariff hikes took effect, followed by a market correction as buyers explored alternative sources.

To stay afloat, Indian manufacturers are adapting production lines, reducing product complexity, and shrinking toy sizes to manage costs. A Delhi-based exporter told the publication that US buyers are demanding steeper discounts and warning suppliers that failure to comply could shift significant business to rival Asian markets. While exporters remain hopeful for policy intervention or tariff relief, many fear that sustained high duties could permanently erode India’s position in the global toy supply chain.

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