New Delhi, 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. It is ...