Toys — the millennia-old companions of childhood — increasingly vie for attention with electronic screens. Bengaluru-based startup PlayShifu says it is solving this modern-day problem for parents by transforming passive screen time into active learning sessions for cognitive development. “We do this by combining physical, tactile play with digital interactivity — all built on our proprietary, patented technology,” says Dinesh Advani, co-founder of PlayShifu.

While online channels contribute 45 per cent of sales, nearly 80 per cent of PlayShifu’s revenue comes from international markets. The products are exported to more than 35 countries, and sold across 2,500 retail outlets.

As global companies diversify their sourcing beyond China, the Indian toy-making industry is among the beneficiaries as brands such as Hasbro, Mattel, Spin Master, and IKEA are now among its client list.

Mihir Joshi, Managing Director of venture capital firm GVFL, points to the emergence of stronger domestic manufacturing capabilities in recent years. “There is a meaningful opportunity for Indian toy companies to strengthen their presence not only in the domestic market but also global markets, as supply chains diversify and demand for trusted manufacturing partners increases.”

Investment magnet

The sector, not surprisingly, has caught the attention of investors.

“India today exports only $150–200 million worth of toys to a global market that exceeds $130 billion. China alone exports $55–60 billion annually. Even a low single-digit share of global toy exports would mean a massive expansion for the Indian manufacturing ecosystem. This makes the category exciting from an investor perspective,” says Bala Srinivasa, Managing Director of Arkam Ventures.

According to Tracxn, the toy industry attracted $92.6 million funding between 2019 and 2026. Funding peaked in 2024, at $32.9 million across 14 rounds. So far this year, $11.6 million have streamed in.

Apart from exports, local demand, too, is seeing healthy growth.

Srinivasa observes that the country’s $2 billion toy market is expected to more than double over the coming decade to $4.5–5 billion.

Legend of Toys manufactures miniature remote control cars, drones, action figures, and planes, apart from arts and crafts kits, puzzles and dolls. Nearly 80 per cent of it is sold online. Co-founded by Afshaan Siddiqui and Vinay Jaisingh, the D2C toymaker also sells through multiple retail outlets in 19 states. It next plans to sell offline directly through pop-ups across India, starting with Bengaluru.

Its 16,500 sq ft factory in north Bengaluru can produce over 45,000 remote control cars per month.

Exports are on the horizon for the startup, with the first shipment heading to the US — the world’s largest toy market — this month, and an entry into West Asian and European markets planned thereafter. “Indian manufacturing is increasingly seen as a credible, high-quality alternative to traditional sourcing hubs,” says Siddiqui.

The company has raised nearly ₹36 crore across three funding rounds and scaled up to ₹30 crore annual recurring revenue (ARR) within 18 months, growing around 20 per cent month-on-month.

“We are looking to exit the year at ₹80-plus crore ARR. Alongside, we are expanding into new categories such as DIY toys,” Siddiqui says.

Full-stack manufacture

Founded in 2022, Bidso India manufactures a range of outdoor and ride-on toys such as kick scooters, tricycles, balance bikes, ride-ons, and baby walkers.

Its customers range from domestic brands to global franchises. Boasting over 400 SKUs across 25-plus brands, the company uses a franchise-owned, company-operated (FOCO) structure — franchise partners deploy capital, while the company has operational and quality control.

“We cover the full spectrum, from entry-level to premium products, and across licensed product lines under globally recognised characters including Peppa Pig, Harry Potter, Transformers, NASA, Hello Kitty, and Hasbro franchises,” says co-founder Aditya Krishnakumar.

“We are a full-stack manufacturing partner with an in-house design and engineering team, 300-plus proprietary moulds, and licensing execution. Our customers get branded, design-differentiated products,” Krishnakumar says.

The company has six manufacturing facilities across Delhi NCR, Goa, and Puducherry.

Exports, which form a small but growing segment of this B2B business, is expected to contribute about 20 per cent of revenue by the first quarter of 2028.

Bidso has raised over ₹70 crore, including ₹63 crore in a recent Series A round. It reported revenue of ₹60 crore in FY26, up from ₹7.52 crore in FY24, its first full year of operations. It plans to expand its manufacturing footprint from 1.3 lakh sq ft to 5.5 lakh sq ft by FY28, targeting an ARR of ₹610 crore.

PlayShifu’s design and storytelling processes are managed in-house at its Bengaluru headquarters. It has assembly lines in places like Palghar, Hosur, and Greater Noida. It has raised about $30 million funding till date. “One of our key milestones is reaching 10 million children globally,” Advani says. The company targets a presence in over 25,000 stores worldwide through an omnichannel strategy.

Policy prop

The startup founders acknowledge the role of government incentives in boosting the toy sector, including the drop in imports and surge in exports.

Legend of Toys co-founder Siddiqui credits the role of ‘Make in India’ incentives, the mandatory BIS quality control clearance for toys, and the hike in basic customs duty on imported toys from 20 per cent to 70 per cent.

Adjacent industries that feed the toymakers’ supply chain — such as metal parts, plastic parts, printed circuit boards and motors — have developed parallelly, enabling local sourcing, he says.

While the rationalised import duties on electronic components has aided toy manufacturers, their supply remains a bottleneck. “The toy industry is also partially vulnerable to tariff changes, shipping costs, and global trade disruptions... plastic and metal prices have gone up, impacting our cost of making,” he explains.

Drawing comparisons with a formidable rival, Bidso’s Krishnakumar says, “China’s scale has allowed for micro-specialised factories within tight geographic clusters, each feeding into a broader ecosystem that has mastered certain products, processes, and materials over decades. Indian consumer goods manufacturing is still figuring out how to scale up without that setup in place. This requires deliberate investment and time.”

On the positive side, he points to the 200-plus per cent surge in toy exports between FY15 and FY23, turning the country into a net exporter.

Published on June 8, 2026