Free Trade Agreements Set to Open New Export Window for India’s Toy Industry

India’s toy industry is preparing for a major export push as upcoming free trade agreements with the United Kingdom and the European Union are expected to give Indian manufacturers wider access to two important global markets. The development comes at a time when India is working to strengthen domestic manufacturing, improve product quality and position itself as a competitive supplier in the global toy trade.

According to industry estimates, the UK and the EU together account for nearly 16 per cent of India’s toy exports. India’s toy exports stood at ₹2,928.87 crore, or about US$ 0.35 billion, in 2024. With new trade agreements reducing duty barriers, Indian toy makers are expected to gain stronger price competitiveness in these markets.

Under the proposed benefits of the agreements, Indian toys are expected to receive zero-duty access in the UK and EU markets. At present, such imports face duties of around 5–6 per cent, which affects the final landed cost of Indian products. Removal of these duties can help Indian exporters offer more competitive pricing while expanding their reach among distributors, retailers and consumers abroad.

The India-UK Free Trade Agreement is scheduled to come into force on July 15, 2026. The UK government has described the agreement as a major step in bilateral trade, while industry groups in India see it as a direct opportunity for labour-intensive and export-oriented sectors such as toys, textiles, leather, engineering goods and processed products.

The India-EU trade agreement is also moving forward, with Commerce and Industry Minister Piyush Goyal indicating that the deal is expected to be signed by December 31, 2026. The agreement is expected to open the wider European market for Indian exporters and provide another major platform for sectors that are ready to meet international quality and sustainability standards.

For the toy industry, the timing is significant. India has been trying to build a stronger domestic toy manufacturing base by encouraging investment, improving safety standards and reducing dependence on imports. Better market access through FTAs can help Indian companies scale production, improve designs, enter global supply chains and compete with established toy-exporting countries.

The sector is already seeing new investment activity. Playgro Toys India has invested around ₹82 crore to establish a manufacturing facility in Ujjain, generating employment for nearly 500 people, with plans to increase the workforce to around 800. The company is also considering another investment. Sunlord Group is setting up a new manufacturing unit in Bihta, Bihar, adding to the industry’s expanding production footprint.

These investments show growing confidence in India’s toy manufacturing ecosystem. As companies expand capacity, they are also expected to focus more strongly on quality, product safety, testing systems, sustainable materials and global compliance. These areas will be essential for success in the UK and EU, where buyers place high importance on safety certification, responsible sourcing and environmental standards.

The FTAs can also benefit India’s micro, small and medium enterprises involved in toy production. Many Indian toy makers operate in clusters and specialise in wooden toys, educational toys, soft toys, plastic toys, puzzles, dolls, board games and traditional play products. With improved export access, these enterprises can find new buyers, participate in international fairs and move from small-scale production to organised export supply.

Traditional Indian toys may also gain from this opportunity. Products inspired by Indian culture, learning traditions, folk art and eco-friendly materials have growing appeal in global markets. With better branding and packaging, India can promote toys that combine education, creativity, craftsmanship and sustainability.

However, market access alone will not guarantee success. Indian manufacturers will need to upgrade testing infrastructure, improve finishing quality, ensure child-safety compliance and build stronger design capabilities. The UK and EU are highly regulated markets, and exporters must meet strict norms on materials, paints, chemicals, durability and age suitability.

The opportunity also has employment significance. Toy manufacturing can generate jobs across design, moulding, carpentry, assembly, packaging, logistics, marketing and exports. As new factories come up in states such as Madhya Pradesh and Bihar, the sector can support local employment while strengthening India’s manufacturing base.

The expected export boost from FTAs fits into India’s broader vision of becoming a trusted global manufacturing hub. Toys represent a sector where creativity, culture, skill and industrial production can come together. With the right mix of trade access, quality improvement, investment and branding, India has the potential to grow from a domestic toy market into a stronger global toy exporter.

The India-UK and India-EU trade agreements can therefore become a turning point for the Indian toy industry. By reducing duty barriers and opening access to high-value markets, they can help Indian manufacturers scale exports, attract investment and strengthen the country’s position in global toy supply chains.