KA Shabir, CEO, Funskool India | Photo credit: BIJOY GHOSH
The Indian toy sector, which has been heavily dependent on the US market for exports and has been under pressure following US tariffs, sees the trade agreement between India and the EU as a positive development.
“With tariffs on toys coming down from around 5 per cent to zero, Indian manufacturers will become more competitive in the EU market both on price and scale. This is expected to significantly improve export prospects and reduce over-dependence on any single region,” said KA Shabir, CEO, Funskool India.
According to Shabir, Europe accounts for about 33 percent of Funskool’s total exports. Of this, almost half is exported to the Netherlands, Spain, Poland and Hungary, making Europe an important and growing destination for our export business, he added.
Very positive
He noted that the sentiment around the India-EU trade deal was broadly very positive. At a time when exports to the US have been hit due to high tariffs, this agreement provides Indian exporters with an important opportunity to diversify into the next largest market – Europe, the executive said.
Shabir told business area After the US tariffs arrived, Funskool actively sought export diversification by working with customers operating in Europe and other markets outside the US. Funskool expects the tangible impact of these diversification efforts to be visible in the next 12 to 18 months, he said.
Funskool reported 20 percent year-on-year export growth from April to October 2025, despite the impact of the U.S.’s 50 percent tariffs, which have created uncertainty among customers. The export growth was due to customers bringing forward their orders in response to tariff uncertainty, but order momentum slowed in the third quarter, Shabir said.
Toy manufacturer Funskool also recently announced its entry into the electronic toy category. The Chennai-based company will leverage its advanced manufacturing facilities in Ranipet and Goa to scale production to meet increasing domestic and global demand for electronic toys.
Published on January 27, 2026