India has had a long history of toy manufacturing going all the way back to the Indus Valley Civilization when the toys used to be made from wood, mud and stones. Around 8000 years later, this toy making tradition seems to have found a new lease of life driven by huge demand and technological advancement. Even before Covid 19 struck, Indian toy industry had started showing signs of improvement and innovation. There is a change in the type of toys that are in demand now, moving away from the traditional cloth and wooden toys to more electronic versions of the same. With a massive growing population and a lot of technological innovation happening, Indian toy Startups have numerous factors in their favor going forward.


Driving factors for Toy Start-ups in India


Prime Minister’s Mann Ki Baat broadcast in August 2020 was an important moment for this sector. He asked the young Indian entrepreneurs to strive to make India world’s toy hub using his popular “Vocal for Local” slogan which has gained even more importance ever since the pandemic broke out and the resultant lockdowns causing supply chain disruptions, primarily from China. Talking about the small share of India in the global toy industry worth 7 lakh crore, he stressed on the need to work to increase this. The Prime Minister urged the young entrepreneurs to make toys in India and about India.

However, even apart from the call by the PM, there have been factors which have driven the indigenous manufacture of toys. Some of them are:

(1)India has a huge population base of around 1.3 billion people and almost half of that population falls in the age group of less than 25 years. This means a lot of potential for toys and games industry and a large market base to make use of.

(2)The incomes of average Indian household have risen steadily over the past few decades resulting in a rise in the disposable income. A good rate of GDP growth has ensured this and it has been observed that people are more willing to spend now than they were a few decades ago. The change in spending habits presents another good opportunity to the toy and gaming sector of India.

(3)The change in spending patterns has also meant that people are willing to spend more on the modern technological toys and games than traditional wooden and mechanical toys. This bodes well for young entrepreneurs who want to make use of technology in their businesses.

(4)A large variety of toys are now available in the market and people have a very diverse range of types and prices to choose from. The families can buy the toys or games according to their economic capabilities and still get a very good deal. Puzzles, dolls, building toys, war tanks etc. are available at very low and very high prices making them affordable for every income group.

(5)The growth and penetration of internet has also meant that another distribution channel, namely online, has opened up new avenues for those involved in toy businesses. Like every other business, the toy and games sector has also benefitted immensely from online distribution.


Players in Indian Toy industry


The emerging demand has motivated the toy companies to manufacture more and new toys and games and be more innovative.

Chennai based Ariro has all wood toys made for children under 8 years of age. These types of toys pose very little risk to children and the toys are not very complex so the children can play and enjoy . General Knowledge based card games by Skillmatics have also become very popular and can be enjoyed by the whole family. It can turn out to be a great learning exercise where kids get to know more about animal kingdom, ports, cities etc.

Ariro has seen phenomenal growth ever since the pandemic hit. Their toys are tailormade for demands by parents of keeping their children away from screens and technology. Their wooden toys keep the children busy while also ensuring that they are also exercising. Their 16 categories of products range from stackers and nesters helping children learn about shapes. They are looking to expand more in the upcoming years.Funvention, on the other hand, is about plants and seeds.  Their kit lets kids set up a germination stand where easy to plant and easy to grow crops can be grown and these activities of the children can be monitored by the parents of the children. This is a unique concept and is getting popular with kids. The owners c,liam that sales have skyrocketed in the last year or so.

Apart from this, there has been a recent rise in toy companies focusing on ethnic toys and Indian history. Startups like Mumbai based Toiing, Bengaluru based Vrnam and Chennai based Kreeda games are the prominent ones providing kids a slice of their own history through toys and games. This is in sync with the PM’s call to make more toys about India and its rich heritage. Toyiing, for instance, has a lot of do-it-yourself toys to offer. Many of these teach kids about Indian mythology and have Ganesha, Krishna and Ravan.

Kreeda games is looking to do something similar albeit in a different manner. They are attempting to familiarize Indian kids with mythology through games featuring Jambavan and Kumbhakarna. Games like Battle of Lanka and Search for Sita have added value because of the knowledge they give to the kids.

Founder of Varnam states that, wooden toys have always been a hit, but parents have been skeptical nowadays because of poor paint or unclean finishing. Varnam tries to correct this by making child friendly baby walkers and stackable dolls. Kreeda is also planning to launch a very ancient game soon. All these developments make the Indian toy sector very interesting and a thing to watch out for in the coming years.[i]

With the big players like Lego, Hot Wheels, Mattel Inc and Mega blocks still going strong and retaining their positions as top players in the Indian toy market, it is going to be very interesting to see if and how the upcoming Indian manufacturers can compete with these global giants.


Toy Startups raising money



In 2018, New Delhi based, Smartivity Labs announced that it had successfully raised 2 million dollars from Lucky Securities and others. Smartivity is a STEM edtech toys company and the investors had confidence in its growth. The investors thought that technology in toys is a big revolution and is going to build a force of tech savvy kids which the parents would love.[ii]

Skillmatics, in 2021, raised 6 million dollars in a series A funding round ked by Sequoia capital and others. Founded in 2017, this startup has seen a lot of growth over the years and sold 3 million toys from approximately 15 thousand retail stores. While they have primarily been limited to North America and India, they said that they will use these funds to expand their reach and operations into other parts of the world. Funds raised will be utilized in strengthening the online and offline presence in US as well. Affordability is the edge with Skillmatics, since they have priced their products in a range of INR 299 to 999.

PlayShifu, an early learning toy company, raised a whopping 17 million dollars from Inventus Capital and Inflexor Ventures joined in as a new investor confirming the growing confidence of investors in Indian toy sector. The company has seen its user base increase from 250,000 in 2019 to 600,000 in 2020.It attempts to reduce the screen time of children and has, for this reason, gained popularity among parents.[iii]

Imagimake Play Solutions, a startup in the toys and gaming sector, has raised 4.4 crore rupees in a pre series A funding round from Roha investment. Imagimake provides an innovative range of products that cater to art & hobby, educational toys, puzzles and 3D model-making sets, facilitating holistic child development. It has established itself as one of the leading players when it comes to artist supplies and construction games and is only expected to grow more from here.


Procedure for setting up a Toy Start-up in India

Quality Control order has been issued by the Department for Promotion of Industry and Internal Trade (DPIIT), for standardization and quality adherence of Toys. The order came into effect from 1st January, 2021. It exempts goods manufactured & sold by artisans registered with Development Commissioner (Handicrafts) and also exempts products registered as Geographical Indications.[iv]The Toy Quality Control order, which came into effect from January 1, 2021, requires all toys and materials designed or intended for use in play by children below 14 years of age to be certified by the Bureau of Indian standards (BIS) and therefore requires all toy manufacturers to comply with BIS to receive the certification. The new QCO also requires all toymakers to set up quality control labs to test their toys, and then have them inspected by BIS officials.

The purpose of introducing this Quality Control Order is to ensure safety of children and is also in sync with the government policy of keeping non-essential import items under check. The critical Indian Safety Standards for toy in the Toys (Quality Control) Order are summarized below:

l.No Indian Standards Details
1 IS 9873 (Part 1): 2019 Mechanical and Physical Property
2 IS 9873 (Part 2): 2017 Flammability
3 IS 9873 (Part 3): 2017 Migration of Certain Elements
4 IS 9873 (Part 4): 2017 Slides, Swings and Similar Activity Toy for Outdoor and Indoor  Domestic Use
5 IS 9873 (Part 7): 2017 Finger Paints
6 IS 9873 (Part 9): 2017 Certain Phthalate Esters in Toy and Children’s Product
7 IS 15644:2006, reaffirmed the year 2016 Safety of Electric Toy


You can choose to enlist with the Startup India Program. Being a part of the Startup India Program entitles you to get funds with a lot more ease and also get some tax benefits for your startup, all of which will help you get through the initial difficult years. An entity shall be considered a startup if:-

(1)   It has been incorporated either as a Partnership firm or a  Limited Liability Partnership or a Private Limited Company.

(2)   10 years have not passed since the incorporation.

(3)   If the turnover of the entity for any of the financial years has not crossed INR 100 crores.

(4)   If the entity is working towards any innovation or is a scalable operation capable of wealth creation.


To reiterate, the toys and gaming industry is set to boom in India in the upcoming years. If the government policies remain favorable, it can be a very lucrative business choice for many young entrepreneurs. We have already seen how the confidence of investors has been growing and they are willing to invest big amounts. Part of the reason of this growing confidence is the innovation of the new startups and the large untapped market to explore in India.

With a mix of technology and traditionalism, toy start-ups have found the perfect recipe to succeed in India. The affordability of these toys gives an added incentive to the parents to buy these toys considering a huge middle class in India. Foreign giant corporations have enjoyed success in this sector for a long time owing to the technological edge and the funds they have had at their disposal. Slowly, but surely, this is changing for the better for Indian manufacturers and it can be a great time to take the initiative and enter the industry.






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