Toy industry in the State is now worth around ₹1,000 crore

Tamil Nadu’s toy market has grown to around ₹1,000 crore, with a surge of new entrants and existing players expanding into newer segments and markets. Those tracking this particular segment say with the State unveiling a dedicated policy for the sector and targetting the establishment of a toy manufacturing park, more start-ups and MSMEs are expected to enter the space over the next two years.

December witnessed two significant developments — one involving Funskool, the Chennai-headquartered toy manufacturer, and the other emerging from the temple town of Madurai. Funskool announced its foray into the electronic toys segment with the launch of a new product range, while Madurai-based Rigwheels, which began operations in 2024, unveiled its debut product — the Vande Bharat toy train.

“The decision to enter the toy industry was profoundly influenced by a business trip to Japan in February 2024. I was genuinely astonished by the sheer variety, infrastructure, and sophisticated ecosystem dedicated to high-quality toys there. I wanted to make similar toys here in Tamil Nadu,” said Saravana Bhava, chief operating officer of Rigwheels. The manufacturing is done in India, with the primary assembly unit located in Madurai, and a significant portion of the specialised component manufacturing outsourced to facilities in Coimbatore.

“We made the conscious, though challenging, decision to extensively invest in and develop all of our complex injection moulds right here in India, rather than importing them from China as is typically done,” he said.

Funskool has been manufacturing toys for some of the global brands. For instance, Spin Master, the Canadian toy major, is currently Funskool’s largest customer. The company manufactures a wide range of Spin Master products for the global market and also distribute select brands in India, including Rubik’s Cube and Perplexes.

K.A. Shabir, CEO, Funskool India Limited, said: “Our collaboration with Moose Toys (Australia) has grown significantly this year, registering a nearly three-fold growth compared to last year, making it one of our most successful partnerships. We manufacture the Bluey range of products at our Ranipet facility.” Funskool has manufacturing alliances with several other international brands such as Learning Resources, Hand2Mind, and Buffalo Games. “We have also commenced production of select private-label products for Walmart,” Mr. Shabir added.

“There are 25-30 big players in the toy industry in Tamil Nadu. There are many small firms that make plastic toys. The industry is currently valued at approximately ₹1,000 crore. And it is expected to grow by 25% year-on-year,” Santhosh Kumar, president of The Tamil Nadu Toy Dealers Association said. Many of these smaller players have their operating spaces in areas such as Royapuram, Madhavaram and Kodungaiyur. The toy manufacturers are worried about the higher U.S. tariffs and also Chinese products flooding the market. “If this industry needs to grow in Tamil Nadu a lot of work has to be done on the technology and R&D front,” said a toy manufacturer.

Darez Ahamed, Managing Director and CEO of Guidance, the nodal agency for bringing investments into Tamil Nadu, said : “What sets Tamil Nadu apart is our full-stack manufacturing ecosystem. Whether it is injection-moulding, electronics for smart toys, wooden craftsmanship, textiles for plush toys, or packaging — the State already has established clusters. The new policy strengthens these linkages and empowers Tamil Nadu’s toy makers to go global and global brands to design, develop, and manufacture in the State.”