The India-United Kingdom free trade agreement (FTA) is poised to drive greater investment in research and development (R&D) among Indian toy manufacturers, empowering them to develop globally competitive toys
Strengthening their bilateral trade relations, India and the United Kingdom (UK) have formalised the Comprehensive Economic and Trade Agreement (Ceta). Indian sports goods and toys will benefit from the elimination of UK import duties, making them more price-competitive compared to countries like China or Vietnam, which do not have similar Free Trade Agreements (FTAs) with the UK.
The Centre highlighted that the projected growth in exports of sports goods and toys is 15 per cent, and the target for the next five years, up to calendar year 2030, is USD 186.97 million. Exports of footballs, cricket gear, rugby balls, and non-electronic toys are set to increase. Going a step further, experts emphasised that the FTA holds the promise of quadrupling India’s toy exports to the UK in the medium term.
“The FTA’s duty-free access improves cost-efficiency and opens wider market opportunities. With strengths in plastics, packaging, and precision manufacturing, India can meet UK demand while supporting supply chain diversification. This shift boosts exports and encourages investment and innovation across the toy and light manufacturing sectors,” highlighted Aditya Krishnakumar, Co-founder of Bidso, a business-to-business (B2B) contract manufacturer specialising in outdoor toys.
India’s Toy Market
While the toy industry in India is highly fragmented—dominated by the unorganised sector which holds about 90 per cent of the market share, a report by India Exim Bank stated that the country’s toy market is expected to reach USD 3 billion by 2028, rising at a compound annual growth rate (CAGR) of 12 per cent during 2023–28.
As India’s toy imports decreased drastically from USD 304.1 million in FY2019 to USD 64.9 million in FY2024, exports increased modestly from USD 129.6 million to USD 177 million from FY2020 to FY2022, according to a report by the Global Trade Research Initiative (GTRI). However, by FY2024, exports had decreased to USD 152.3 million, the same report added.
Experts now emphasise that the FTA promotes harmonisation of technical regulations and conformity assessment procedures, simplifying the certification and testing processes that are often cumbersome and costly for exporters. This will streamline compliance for Indian toy manufacturers, especially micro, small and medium enterprises (MSMEs), making it easier to access the UK market without duplicative testing or documentation.
“With the FTA in place, exports to the UK are projected to grow at a compound annual growth rate (CAGR) of 25–30 per cent, potentially reaching USD 80–100 million within the next three years. In the long term, if Indian manufacturers capture just 10 per cent of the UK’s USD 4 billion toy market, annual exports could exceed USD 400 million,” highlighted Shivalika Midha, International Trade Law Associate at Jotwani Associates.
Meeting The UK’s Quality Standards
Highlighting growing awareness around the use of safer, non-toxic materials and better packaging, experts noted that India is closer than often perceived when it comes to meeting the UK’s safety and quality standards. Bureau of Indian Standards (BIS) norms have already pushed the industry to clean up its act, and many exporters are already meeting EN 71 and CE standards, they added.
In a sign of rising quality standards in India’s toy market, BIS has found 91 per cent of the 17,860 samples of toys to be in line with the Quality Control Order since its implementation in January 2021, as per media reports. The reports noted that 16,240 of the 17,860 samples tested so far have complied with the norms. BIS has tested 537 samples in the current financial year (FY26) up to 17 June, as per the report, which added that around 98 per cent of the tested samples were compliant.
“Over 500 Indian toy manufacturing units have implemented ISO 9001 for quality management systems and have acquired necessary certifications such as CE marking, EN 71, and ASTM standards. Moreover, there is a growing ecosystem of NABL-accredited laboratories and BIS-approved testing centres across key toy clusters like Noida, Karnataka, and Maharashtra,” Midha added.
New Scheme In Progress
Aimed at helping Indian toy manufacturers become world-class by enhancing design capabilities, ensuring quality manufacturing, strengthening packaging, and supporting brand building, the Centre is planning to introduce a new promotional scheme for the toy sector, Union Commerce and Industry Minister Piyush Goyal stated.
Addressing the 16th Toy Biz International B2B Expo 2025, Goyal expressed confidence that India’s toy industry is poised to become a key player in the global market. Highlighting that the Indian toy industry, once heavily dependent on imports, is now manufacturing domestically, Goyal stated that 153 countries are now importing toys from India.
A Golden Opportunity For MSMEs
For India’s MSMEs to effectively tap into the UK toy market under the FTA framework, experts noted that a multi-pronged and sustained support system is essential. As these enterprises constitute over half of the domestic toy manufacturing sector, they often lack the resources and expertise to navigate international markets independently.
“To really make the most of the UK market, MSMEs need easier access to credit, help navigating export norms, and support with certifications and logistics. Tools like trade fairs, digital outreach, and government-backed schemes can bridge the gap. With the right ecosystem in place, Indian MSMEs are more than capable of scaling and competing on the world stage,” Krishnakumar explained.
Midha added that the most immediate requirement is compliance facilitation. This includes subsidised access to mandatory UK and European Union certifications such as CE marking and EN 71, along with the development of regional, shared testing and certification infrastructure.
Financial assistance is also necessary to help MSMEs upgrade their machinery, packaging systems, and information technology (IT) capabilities. Dedicated export credit lines through institutions, with preferential interest rates and longer repayment terms, can provide the much-needed liquidity for modernisation, experts added.
The FTA opens doors to a more value-driven relationship with UK buyers, where Indian toys are seen for their design, quality, and reliability, not just price. It is an opportunity to move up the value chain, build long-term partnerships, and redefine what ‘Made in India’ stands for globally.
