KA Shabir, CEO, Funskool India, during an interview with Businessline in Chennai. Photo: Bijoy Ghosh | Photocredit: Bijoy Ghosh
India is emerging as a hub for global toy production, while American retailers want to diversify China in the midst of the American rate uncertainty.
Funskool India, the Toymaker promoted by Tyre Major MRF Group, says that it has seen increased partnerships with international toy retailers, especially in the US, with some deals that have already been signed and others close to signing.
The export of Funskool in the past four months has grown by 24 percent yo -yy compared to the same period last year, KA Shabir, CEO, Funskool India Ltd, told line. “We do two products for the retail giant Walmart, which now purchases directly from India. Each of the products is large in terms of volume, and one is our own product, and we both make for them,” he added. “We also work with Target,” said Shabir.
Funskool is also recently connected to Asmodee (in the US) for the domestic production of games such as Catan etc. Likezo, it has also expanded its binding with Ravensburger (Germany) for introducing new versions of Scotland Yard.
Expansion activities
The global expansion of Funskool is supported by its two facilities in Ranipet, Tamil Nadu, where it doubled its production capacity last year. A new facility will also be in Goa, to take advantage of the recovering of the supply chain in the toy sector, Shabir said.
“In the past five years we have made considerable capital investments to support our growth and capacity improvement,” said Shabir, with the Capex being around £ 70 crore. “Our most important focus for FY26 is the expansion of our Goa factory; this is expected to be completed in the mid-26,” he added. “The use of automation technologies is an important focus in our plants,” he said.
Refemplies rate
The recently announced American rates on India at 25 percent, however, will be set to rock the boat and Shabir expects it to decrease the shine of India as a production hub for toys.
“Vietnam [20 per cent tariffs] and Indonesia [19 per cent] will probably get a lead over India because of their relatively lower tariff structures. As a result, the strong momentum we have seen in recent months can start to tap, “predicts the CEO.” The imposition of a ‘penalty’ rate also introduces a low uncertainty, at a critical moment when new product development is for the autumn of 2026 season, he added.
Although the domestic toy market is too fragmented, the global toy market is around $ 100-120 billion in size.
Cheerful on Q-Commun
Funskool will terminate the fiscal by around $ 45 million and focuses on a minimum of 15 percent growth per year. “We must be able to achieve it, depending on no major disruptions in terms of rates,” he said.
The domestic sale makes up only 25 percent of the total turnover, but the company notes good traction in the fast trade segment. In the pre-famous days, Online channel was only about 15-20 percent of domestic sale, but now it has risen to 40-45 percent. “In that 40-45 percent, almost 60 percent are fast trade,” said Shabir.
In addition to the production for others, Funskool also has its own line-up of infants and kindergarten products under the Giggles brand, with more than 150 products. It also has his own brand of dough under the brand of fundough and educational puzzles that are played and puzzle pop.
Despite the opportunities, the toy sector remains challenges for increasing capacity and finding talent to guarantee fast lead times for the Western market. The industrial practice of importing CKD units from China and assembling and selling is also an important roadblock to the sector.
Published on August 5, 2025
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