New Delhi/Bengaluru, Sept. 6 -- Growing investor interest in India's toy and babycare startups is facing a new threat: Trump's tariffs. Yet, founders and their financial backers are counting on tax cuts, local incentives, curbs on substandard imports and fast-growing quick-commerce sales to navigate the storm. "We see a lot of demand for vocabulary and STEM [science, technology, engineering, mathematics]-focused play sets like building blocks for learning new words," said Sourabh Jain, founder and chief executive of EleFant. "The quality of materials has also improved as parents are increasingly preferring products that are manufactured locally." EleFant raised Rs.6 crore in seed funding from Venture Catalysts and Malpani Ventures in July. Mirana Toys, Jammbo, Toyflix, Snooplay, Kidology and Legend of Toys, have also raised funds from VC firms like Riverwalk Holdings, InfoEdge Ventures and AngelList in the past two years. Larger rounds have been flowing in, albeit slowly. Candytoy raised $13 million in a Series A from Sixth Sense Ventures and Abakkus, while Kido Enterprises has drawn multiple rounds from UBS, Heritas Capital, and 1Crowd in 2024. The momentum has continued this year, with Peeko securing $3.2-million led by Stellaris, Candytoy closing one of the largest recent deals, and Kido's cumulative funding reaching $6.9 million. Tuco Kids raised $4 million from RTP Global this week. The scale of opportunity is massive, with a base of nearly 300 million children in India and a handful of scaled players, said Satish Meena, co-founder of Datum Intelligence, a data analytics firm. But, this optimism is still marked with caution as the Indian toymaking industry, valued at $2-3 billion domestically by Redseer, risks losing overseas clients after Donald Trump's 50% tariffs on Indian goods. "When tariffs first came out, in that first phase our business gained a lot of momentum, because many global retail partners started flocking to Indian brands and manufacturers," Dhvanil Sheth, founder of Peak XV-backed educational toys firm Skillmatics. "But tables have turned: India has become the centre of the storm, with 50% tariffs, putting us at a relative disadvantage. we're working on making our supply chain more agile, reassessing cost structures, and rethinking pricing." The firm raised $23.8 million and rely on global demand, with North America accounting for 65-70% of revenue, India 15-18%, and UK around 10%. The Bureau of Indian Standards' mandatory quality and safety approvals have curbed cheap toy imports while encouraging safer, locally made alternatives through strict mechanical, chemical, and electrical compliance....