How to Start a Toy Business in India

Business Tips

How to Start a Toy Business in India

Registrationwala

The ‘toy business’ is a term that refers to a business that manufactures or sells toys for children. A toy business can be engaged in several activities such as selling toys to retailers in bulk, who then sell them to consumers at a higher price, selling toys to consumers in an online store or producing toys in a factory. 

If you want to find out how to start a toy business in India, then going through this article will guide you through all the required steps.

Why is Starting a Toy Business a Good Idea?

There is a high demand for toys from a large population of children, increasing disposable income, rising middle class and potential for innovation in the toy sector. In 2023, the Indian toy market was valued at $1.7 billion, and by 2032, it is anticipated to reach $4 billion. 

Hence, it is evident that the demand for toys in India is pretty high and in future, this demand will only rise further. Further, India has Free Trade Agreements with UAE and Australia that provide duty-free access to its toy exports. 

Because of all these reasons, starting a toy business in India is considered a good business idea. The toy business offers good profit margins, especially when it focuses on safe, educational, locally-sourced and sustainable toys.

Requirements for Starting a Toy Business

For starting a toy business, you must fulfill the following requirements:

1. Digital Signature Certificate

Digital Signature Certificate, or simply DSC, is a digital alternative to a physical certificate such as a passport or driving license. DSCs are helpful in establishing identity, accessing MCA services or information online, or in signing digital documents like e-forms easily. Further, they can also be used to send encrypted emails. 

Under the Information and Technology Act, 2000, DSCs are considered legally valid in India. For setting up a toy business as a private limited company or any other company registered under the Companies Act, 2013, a DSC is required to be obtained. 

The DSC must be secured before beginning with the company registration process as it’ll be used to sign all the crucial company incorporation documents like Articles of Association and Memorandum of Association. Further, it’ll also be required for GST registration for toys and verifying GST returns online. 

2. Company Registration

You can open your toy business in India as a sole proprietorship. In this case, you do not need to register your business with the Registrar of Companies (RoC). But in a sole proprietorship, you will not have limited liability protection. This means, if you face serious business losses or fall in debt, you will be held liable for the same. Your personal assets will be at risk in such a case. 

However, if you register your toy business as a one person company or a private limited company, you will get limited liability protection and your personal assets will not be at risk if the business is in debt or makes losses. Additionally, you will also be able to get access to funding more easily, through bank loans or angel investors.

To register your toy business as an OPC or Pvt Ltd Co, you must file an application with the Registrar of Companies (RoC). For assistance in the company registration process, it is recommended to seek assistance from professional consultants to ensure the process takes place smoothly without much stress.

3. GST Registration

GST registration refers to the process for obtaining a unique 15-digit goods and service tax identification number (GSTIN) for a business entity from the GST authorities so that all the operations of and the data relating to the business can be collected by the government. 

GST registration is not mandatory for a business if its turnover does not exceed the threshold limit of Rs. 40 lakh or Rs. 20 lakh or Rs. 10, as the case may be depending on the state. However, if the threshold limit exceeds, GST registration becomes a mandatory requirement.

4. BIS for Toys

BIS full form is Bureau of Indian Standards. BIS is India’s national standards body that issues BIS certificates to toy businesses to ensure their toys meet the required safety, quality and performance standards. According to Toys (Quality Control) Order 2020, BIS certificate is mandatory for all the toys which are manufactured for children under the age of 14. This certificate is also mandatory for all the toys which are imported into India. 

By obtaining BIS for your toy business, you ensure that your toys are not toxic or substandard products. Toys that are unsafe for children can cause physical injury, choking or health issues from toxic materials. 

5. Import Export Code

An import export code (IEC) is a 10-digit alphanumeric code issued by the Directorate General of Foreign Trade. Whether you want to run a business of toy export or toy import, securing IEC from DGFT is a mandatory requirement. Unless DGFT grants IEC, no business shall make any import or export. 

To apply for IEC online, you can visit the official website of the Directorate General of Foreign Trade and fill out the IEC form and attach all the required documents. Once IEC code is granted, it remains valid for the lifetime of the business to which it has been assigned. However, it must be updated on an annual basis to avoid deactivation. 

These are pretty much all the major requirements for opening a toy business in India. If you need further assistance, you can contact our team at Registrationwala.

Toy Business Ideas in 2025

Here are some popular toy business ideas that you might find interesting:

1. Interactive Learning Apps for Kids

You can develop digital interactive apps for tablets and smartphones that make learning fun through games. 

You can make your apps available on Google Store or Apple Store, and make money through subscription models for premium content.

2. STEM Kits

Another toy business idea is to manufacture kits that engage kids in STEM (Science, Technology, Engineering and Mathematics) through experiments or hands-on projects. 

You can make a profit by selling STEM kits, providing educational subscriptions with monthly project deliveries or entering into supply contracts with various schools. 

3. Eco-friendly Learning Toys

You can design and manufacture educational toys that are made up of sustainable materials or recycled materials to cater to parents and educators who are environmentally conscious. 

You can collaborate with green retailers or sell eco-friendly learning toys on direct-to-consumer e-commerce platforms. 

4. Art and Craft Development Kits

You can provide art and craft kits for children that encourage creativity, including supplies and instructions for a wide range of art and craft activities. 

You can make a profit by kit sales, art workshop fees, and collaboration with schools for art education programs. 

5. Language Learning Toys

You can engage in sales of language learning toys for multilingual development. Such toys allow children to learn new languages through playing, such as with the help of dolls that speak in various languages or with the help of interactive language games. 

You can become a retailer of language learning toys, or enter the online market offering educational resources for kids. 

Conclusion

Starting a toy shop business can be a profitable venture because of good profit margins on toys and the growing demand for toys amongst children. To open a toy business in India, you must fulfill all the mandatory requirements such as obtaining a digital signature certificate, company registration with RoC, GST registration, BIS for toys and import export code. Doing so will allow you to operate your toy business legally, with peace of mind. 

If you want to register your toy business in India, connect with Registrationwala for assistance in company registration.

Frequently Asked Questions (FAQs)

Q1. Who requires BIS for toys?

A. Any business engaged in manufacturing toys for children under the age of 14 requires BIS for toys. 

Q2. Do toy importers also require the BIS certificate for toys?

A. Yes, toy importers who want to import toys into India require BIS for toys. 

Q3. What is the GST rate for toys?

A. The GST rate for toys depends on their nature. Toys such as scooters, tricycles, and pedal cars which are produced non-electronically attract a GST rate of 12%. Toys such as tricycles, scooters, and pedal cars produced electronically attract 18% GST rate.

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