The industry is growing at a compounded annual growth rate (CAGR) of about 20 per cent, the study said.
The Indian toy industry caters to about four crore kids in the age group of 12 years across the country. But domestically manufactured toys account for only 15 per cent of the market and the rest of the market is flooded with imported toys from countries like China, Korea, Malaysia, the UK and the US.
The industry offers a wide range of products like electronic toys, board games, construction toys, educational games and collectibles.
The domestic toy industry is highly fragmented, unorganised and is predominantly dominated by micro, small and medium-scale manufacturers.
The Indian toy industry is dogged by lack of innovation, marketing, advertising, distribution and abundance of imported products.
Cities like Ahmedabad, Bangalore, Hyderabad and Pune are fast-emerging as toy manufacturing hubs.
The industry employs about 25 lakh people both in the organised and unorganised sector.