KA Shabir, CEO, Funskool India
| Photo Credit:
BIJOY GHOSH
The Indian toys sector, which has been heavily dependent on the US market for exports and was seeing strain after the US tariffs, sees the India-EU trade agreement as a positive development.
“With tariffs on toys reducing from around 5 per cent to zero, Indian manufacturers will become far more competitive in the EU market, both on pricing and scale. This is expected to materially improve export prospects and reduce over-dependence on any single geography,” KA Shabir, CEO, Funskool India, said.
Europe accounts for approximately 33 per cent of Funskool’s total exports, Shabir noted. Of this, nearly 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 broadly, the sentiment around the India–EU trade agreement is very positive. At a time when exports to the US have been impacted due to steep tariffs, this agreement provides Indian exporters an important opportunity to diversify into the next largest market — Europe, the executive said.
Shabir told businessline earlier that as the US tariff hit, Funskool has been actively pursuing export diversification by engaging with customers who have exposure to Europe and other non-US markets. Funskool expects the tangible impact of these diversification efforts to be visible over the next 12–18 months, he said.
Funskool clocked a 20 per cent year-on-year growth in exports in April-October 2025 despite an impact of the 50 per cent tariffs by the US, which has created uncertainty among customers. The exports growth came as customers front-loaded orders in response to tariff uncertainties, however, order momentum slowed in the third quarter, Shabir then said.
Toy manufacturer Funskool recently also announced its entry into the electronic toys category.The Chennai-based company will utilise its advanced manufacturing facilities in Ranipet and Goa to scale production to meet rising domestic and global demand for electronic toys.
Published on January 27, 2026
