December 9, 2025 • 22 mins
The US tariff war with China sent American companies scrambling to find alternative manufacturing hubs. India looked promising until the White House upended everything.
On today’s Big Take Asia podcast, K. Oanh Ha heads to India, where she goes inside two toy factories scrambling to adapt to Washington’s shifting trade policies. How sky-high tariffs are undercutting India’s ambitions to take China’s crown as the world’s factory floor and forcing American manufacturers to make a tough choice.
Read more: Cutting Ties With China Is Harder Than Companies Expected
Further listening: An American Toymaker Struggles to Break Up With China
The American Toymaker Suing Trump Over Destructive Tariffs
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
The morning of August fourteenth, like the start of most days,
on the outskirts of New Delhi, was hectic. Cars jostled
with buses, tooktooks, trucks, and occasional cow as millions of
Indians made their way to work. But for Amitop Carbunda,
that was all a breeze compared to what awaited him
on his factory floor.
Speaker 3 (00:31):
That was a crazy day. Our team work NonStop.
Speaker 2 (00:34):
Ami tab is the managing director of Sunlord, a manufacturer
that specializes in plush toys. I met a metisfactory in
the city of Noida, just outside of New Delhi, and
he told me about that hectic day.
Speaker 3 (00:49):
That day, I cloked about twenty nine thousand steps he's
an average of ten thousand.
Speaker 2 (00:57):
Most of Sunlord's toys end up in American homes, Teddy
Bears and Disney's Elsa Princess dolls for Walmart, nursery products
for Pottery Barn and West Elm.
Speaker 3 (01:08):
This is the packing area of metal detection was coming.
Speaker 2 (01:13):
His factory was racing to get a container of kids
yoga balls covered in plush fabric, assembled, packed and shipped
out fast. This was the very first order for a
new customer, American toymaker Learning Resources, and they had two
days to make it happen. But some lord's deadline wasn't
(01:36):
set by their new customer. It was put in play
by the White House and President Donald Trump.
Speaker 4 (01:42):
The White House making a move to slap of fifty
percent tariff on imports from India. White House trade advisor
Peter Navarro cranked up pressure on India to halt its
purchases of Russian oil.
Speaker 2 (01:54):
Earlier this year, India seemed like a safe bet. President
Trump and Indian Prime Minister render Amodi were developing what
seemed like a romance. Modi visited the White House in February.
Many businesses thought India would be one of the first
countries to strike a new trade deal with the US.
Speaker 4 (02:12):
The government had kind of said, you know, this is
going to be a safe place to manufacture. This is
one of our priority countries.
Speaker 2 (02:18):
Elana Woldenberg Ruffman is vice president of product development for
Learning Resources, based outside Chicago. We met earlier this year
when I traveled with her to visit factories in Vietnam.
Speaker 4 (02:29):
We really started to amp up our efforts to expand
our presence within India. The fact that the tariffies in
India changed with like four weeks notice has real implications
on real businesses like US.
Speaker 2 (02:43):
Like many US companies, Learning Resources has been looking to
reduce its reliance on China since Trump's first trade war.
But when Trump took office this year and began ramping
up tariffs with the aim of raising money and bringing
manufacturing back to the US, that put the China end
of the supply chain under pressure. It pushed Learning Resources
(03:04):
to accelerate its plans to shift its supply chains elsewhere,
to Vietnam and to India, to companies like sun Lord.
But then Trump surprised India and slapped its goods with
one of the highest terraff freights facing any major manufacturing country.
India has been a good friend, but India has charged
basically more tariffs and almost any other country, And for
(03:27):
sun Lord, that meant the pressure was on.
Speaker 3 (03:31):
So the goods need to be in the stores by
first of October for the Christmas sales.
Speaker 2 (03:38):
With tariffs doubling, Learning Resources asked Omiitov's factory to speed
up production. His team worked into the night, pushing fifteen
thousand pieces through final assembly and packing that shipment barely
made it out, and we slayed it to land in
the US one day before the higher tariffs went into effect.
Speaker 3 (03:56):
Whatever was before twenty seven dougars was twenty five percent
a ship novice fifty percent.
Speaker 2 (04:02):
When you're an American company sourcing products half a world away,
there's already enough uncertainty to contend with. Tariffs don't just
add cost, they add chaos.
Speaker 4 (04:12):
The boat ended up getting checked in six hours too late,
so the shipment had a fifty percent tariff instead of
a twenty five percent tariff.
Speaker 2 (04:19):
That costs the company fifty thousand dollars.
Speaker 4 (04:23):
The cost of those terraffs is entirely something that we,
as an organization have to pay. It is US, an
American business.
Speaker 5 (04:29):
That had to pay those tariffs.
Speaker 4 (04:31):
The irony of it is, had we left it in
China and eliminated all the work of finding a new factory,
moving it, the product, training, the factory testing, et cetera,
it would have been cheaper.
Speaker 2 (04:54):
This is the big take Asia from Bloomberg News. I'm wanha.
Trump's tariff war with China was supposed to create an
opportunity for India, a chance to become the world's next
factory floor, but then the White House changed its mind.
Today in the show, I traveled to India and go
inside the factory scrambling to adapt to Washington's tariff whiplash
(05:18):
and get a ground view of the uniquely Indian solutions
to build a manufacturing powerhouse without China And every lunch,
I met Sun Lord's factory in an industrial park outside
(05:40):
New Delhi known as Neuda Toy City.
Speaker 3 (05:42):
Bloomberg New channelna.
Speaker 2 (05:45):
Amitap Karbunda is introducing me to his father, eighty one
year old Ashak Karbanda.
Speaker 5 (05:50):
Papa, Hello, sir. She is from Bloomberg.
Speaker 2 (05:55):
Ashak founded Son Lord in nineteen seventy nine. Back then,
the company made women's clothing and decor like curtains and
cushions for export. Amitop built out the company's toy sector,
which now makes up the bulk of the business. Ashak
still serves as chairman, overseeing the company's finances and comes
into the office most days. Father and son often eat
(06:17):
lunch together in the office's homie kitchen.
Speaker 3 (06:20):
This is Lentil's. Normally are Lentil's and gravy, but this
is where I formed the speciality the family. The city
cotta cheese and this is potatoes.
Speaker 2 (06:32):
Amiitop joined the business after college with a degree in
chemical engineering. Over lunch, he shares that his own son,
representing the family's third generation, will soon be joining the company.
Speaker 3 (06:43):
He studied economics here in India and then the US
he did his master's in sustainability management.
Speaker 2 (06:50):
It occurs to me that most of the toymakers I've
met during this journey are family businesses. The Chicago toymaker
I've been following learning Resources is run by the found
under's grandchildren and great grandchildren. For decades, it's relied on
Chinese manufacturers, who are also family owned. In Vietnam and
here in India, the toy industry is dominated by companies
(07:12):
passed down from generation to generation. It's part of the
reason the US trade war is so devastating. The mom
and pops here lack the deep pockets of major corporations.
As a terra regime changes pivoting won't come easy.
Speaker 6 (07:27):
The kind of uncertain day we are facing now, I've
never faced it in my life, un certainly, which is
totally out of your controling.
Speaker 2 (07:38):
In Today, sun Lord employees about nine hundred workers in
three factories. It specializes in bespoke nursery items like crib
bedding and fabric toys.
Speaker 3 (07:47):
This Christmas decord for one of the Williams Sonoma brands,
which is that Disney Range Disney Design Custmos dech Cord.
It's a snoopy ye.
Speaker 2 (08:02):
When Trump briefly raised tariffs on China to one hundred
and forty five percent earlier this year, Ami Toob was
inundated with phone calls and emails. His factory was already
running full, so he's only been able to take on
a few new clients. One of those was Learning Resources,
which ordered the yoga balls. They're covered with colorful furry
(08:23):
animal faces unicorns, penguins, and puppies, and they'll be sold
in Walmart stores for the Christmas holidays. But after that
first rush shipment in August, things have stalled.
Speaker 3 (08:34):
It was a plan for a second order, but that
has now been postponed.
Speaker 2 (08:38):
Omiitob says Learning Resources has put about two dozen other
products it was exploring with this factory on hold too.
New orders from existing customers have also been pared down,
and instead of growing fifteen percent this year as planned,
the company will be lucky to even see a three
percent growth.
Speaker 3 (08:55):
There's a lot of unpredictability. You don't know what's going
to happen tomorrow. In the short term, new investments, new
products are a bit on hold.
Speaker 2 (09:07):
It's a pattern playing out across India's burgeoning toy sector.
India's higher tariffs on goods to the US put it
at a disadvantage. Both China and Vietnam have struck better
deals with lower levees, and the weight of India's sky
high tariffs is causing pain in the country's biggest industrial hubs.
Speaker 1 (09:27):
We produced two hundred thousand darts every day.
Speaker 2 (09:30):
That's VIJENDERA. Babu, the founder of Microplastics, the largest toymaker
in the country. I've flown to Bengalore, one thousand miles
south of New Delhi to tour Vigendria's plant. The factory
is huge, six hundred and fifty thousand square feet of
manufacturing space that stretches over more than eleven football fields.
Speaker 1 (09:50):
This three is apply to Walmart completely.
Speaker 2 (09:53):
The plant looks busy with hundreds of workers assembling NERF guns,
paw patrol cars, and Little Tykes baseball sets, but Viajendra
says the factory isn't anywhere near capacity.
Speaker 1 (10:05):
We are in still end of September, supposed to be
a very, very peak season, but you can see still
it is a bit slow.
Speaker 2 (10:12):
I really come to understand how badly tariffs have hit
his business when he shows me the plant's warehouse and
it's eerily quiet. The storage area is as big as
five Olympic sized swimming pools, full of products that were
pulled off the production lines after Trump slapped that fifty
percent tariff on India.
Speaker 1 (10:33):
All these are waiting to be fully assembled now and
then to be shipped because of the older stoppages or
out of cancelation. So we are just trying to store here,
so different toys, different parts of toys. You can see
in thousands and thousands.
Speaker 2 (10:47):
It is that during our tour he gets on a
video call with one of his two other factories and
shows me an even bigger warehouse with racks stacked full
of finished products, not.
Speaker 1 (10:58):
Eating, frusture, eating future, hacked and ready to go, everything done,
fact and ready to be shipped.
Speaker 2 (11:03):
As much as a quarter of the factory's orders have
been put on hold or canceled. Thegender estimates the factory
might be stuck with as much as twenty million dollars
worth of goods. Then there's the loss of new business,
which he says represents as much as fifteen million dollars
all on pause. Like Omitop, the gender started the year
(11:24):
with an ambitious growth plan. Forty percent existing customers were
already looking to move products from China. New clients wanted
to place orders, so he built a new three hundred
thousand square foot facility to prepare for the new demand.
Speaker 1 (11:38):
His plant is completely ready. We should have opened and
we should be getting the machines in next two months now.
But now we are also waiting. Should we order those machines?
Should we weight and watch? So we have taken addation
to wait and watch.
Speaker 2 (11:49):
Now with so much uncertainty, where does India's toy industry
go from here? And can President Trump's tariffs really bring
toy manufacturing back to the States. That's after the break. Wow,
(12:25):
it's huge in here.
Speaker 1 (12:26):
It's a six hundred and fifty thousands coudfoot plant. You'll
have good about of walking today.
Speaker 2 (12:32):
In a corner of the massive microplastics factory outside Bangalore,
the sound of heavy machinery fades away. Vijender Baboo, the founder,
brings me to the second floor. Here, the facility's industrial
scale gives way to delicate artistry.
Speaker 1 (12:49):
It's like going to a beauty salon to get those hairstyles.
Speaker 2 (12:54):
And it really is like a salon for tiny dolls,
and it requires all the expertise of a team of
highly trained hairdressers, only in miniature. I watch you worker
handle the first critical step hair rooting. He holds a
bald plastic doll head up to a machine. As he
rotates it, needles punch fine blonde strands with rapid fire speed.
(13:18):
In seconds, the doll goes from bald to having a
full head of shimmering hair.
Speaker 1 (13:22):
Like hair transplantation.
Speaker 2 (13:24):
You know, you can see that that is very much
like a hair transplant.
Speaker 1 (13:28):
You can see.
Speaker 2 (13:30):
Then the real magic happens. I watch as dozens of
women transform these wild manes into bobs, wavy curls, high ponies,
and elaborate braids.
Speaker 1 (13:41):
Yeah, you see the different styles there. It's very difficult
to do it by machine.
Speaker 2 (13:47):
Watching these rows of skillful stylists, I realize this is
where India's manufacturers have a true advantage over the rest
of the world. Even today, you can't automate a tiny,
perfect front braid you need human hands, I asked Vijendra
if he thinks this kind of toy manufacturing can be
done in the US.
Speaker 1 (14:08):
It's not that it can't be done, obviously, but it's
all about the cost. Machines can manufacture these things, but
then there's a lot of decoration, a lot of printing,
a lot of plush which requires stuffing.
Speaker 2 (14:22):
This reliance on skilled human hands reveals the flaw in
Trump's promise to bring manufacturing jobs back to the US.
These workers here make about twenty three thousand rupees a
month or about two hundred and fifty dollars. Americans can't
live on wages that low, so if these toys were
made in the US, one of two things would have
(14:42):
to happen. Either wage costs would rise, pushing the price
of these toys to unaffordable levels and driving the manufacturer
out of business, or the entire process would need to
be automated. This leaves the world's toy makers in a bind.
They can't stay in China and in the USA is
out of reach for low cost, low margin products. The
(15:04):
world needs a new workshop, a place with millions of
workers ready to step onto the assembly line. Could that
place be India.
Speaker 5 (15:13):
I believe this is India's moment.
Speaker 2 (15:16):
Manugupta is chairman of the Toy Association of India, a
trade group for the manufacturers and dealers in the country.
Speaker 3 (15:23):
This industry has the potential to become the next extile
of the government innistry for India.
Speaker 5 (15:28):
Entrepreneurs are here ready when willing to invest. An ecosystem
has been created.
Speaker 2 (15:34):
Prime Minister Mody is certainly betting that India can become
the world's next toy factory. In twenty twenty, he launched
the National Action Plan for Toys to try and capture
a slice of the one hundred billion dollar global toy market.
Mody's blueprint includes strict safety controls for all toys sold
in India and ironically, a seventy percent tariff on imported toys.
(15:57):
That's all designed to keep foreign competitors, namely China out.
Companies like Learning Resources see a lot of advantage in
India's scale and unlike Vietnam, where wages are rising as
factories compete for a smaller pool of workers, the size
of India's workforce keeps labor costs low, and Gupta of
(16:18):
the Toy Association says the country's manufacturers are playing the
long game.
Speaker 5 (16:23):
A lot of companies understand and consider that these tariffs
are not going to stay for too long. You need
to prepare India and their manufacturers so that whenever these
tariffs come down, they become an alternative to what they're
buying in China of Yourtama Indonesia.
Speaker 2 (16:41):
Preparing India's toy industry will require some big changes. Modi's
National Action Plan has shut out foreign producers, but local
manufacturers have been making toys mainly for domestic consumers. A
lot of learning Resources says this means most Indian factories
aren't yet making good with a quality that international buyers demand.
Speaker 4 (17:03):
I think really the next big thing is just going
to be adjusting the factories to align to Western standards,
so quality standards, timelines, all those sort of little details
that come with working with a new partner.
Speaker 2 (17:19):
Alana sees India's potential, but right now it's still a
tiny player in a massive market. India sold about one
hundred million dollars worth of toys to Americans last year. China,
on the other hand, sold eleven billion dollars worth in
Vietnam three billion. Still as Trump's tariffs push companies like
(17:40):
Learning Resources to pivot away from China. India's share of
the toy market is growing, but China still dominates the
entire toy making industry. I saw this in Vietnam. Most
of the raw materials used to make toys still come
from China, so does most of the investments and expertise.
Ami toop Karbanda for sun Lord says he'd like to
(18:01):
see more of that Chinese capital and influence in India.
Speaker 3 (18:06):
To be the best, we have to learn from the best,
right and right now.
Speaker 2 (18:09):
China is the best in this, but thanks to deep
rooted tensions between India and China, it's hard to develop
ties to Chinese entrepreneurs and to Chinese capital. Omitob says
that's forcing entrepreneurs like him to come up with their
own uniquely Indian solutions. At sun Lord's plant outside New Delhi,
(18:32):
Omitob shows me one particularly expensive pain point for toymakers.
Speaker 3 (18:37):
This is a two head laser cutting machine with an
overhead camera. This is an elephant being cut. There you
see there, you be hears. The tail is the body
of the elephant.
Speaker 2 (18:50):
Elephant ears and trunks have been stamped onto the gray
plush fabric, a red laser being cuts the fabric, leaving
a thin trail of smoke. Machines like this laser cutter
cost the kind of money that few Indian factory owners have.
Omiitob solution is to start a joint venture with two
of his biggest competitors.
Speaker 3 (19:12):
One plus one normally means in mathematics it translates to two.
Speaker 2 (19:16):
Tarun Chiitwani owns a toy factory just up the road
from some lord's facility, but in.
Speaker 3 (19:22):
Terms of manufacturing activities and all that, one plus one
translates to eleven.
Speaker 2 (19:27):
Tarun Omitob and a third partner are opening a facility
together next door to Tarun's toy factory. It will run
twenty four to seven, the first laser cutting facility of
its kind in India, and they're also planning a new
factory with more than three hundred sewing machines. In the past,
these three entrepreneurs would have been rivals.
Speaker 3 (19:47):
Not today, we're not competing against each other. Our objective
is to get business into India.
Speaker 2 (19:55):
And as they wait for India to clinch a better
deal with Trump that would lower the high tariffs, they
have to come up with alternative strategies.
Speaker 3 (20:03):
Plan A, tariffs are going to go away. We're going
to be back to normal. Plan B we need to
start expanding the market, look at other options. Plan C
we have to focus on the Indian market.
Speaker 2 (20:17):
Back in Chicago, Learning Resources has learned to be flexible too.
Earlier this year, with China facing one hundred and forty
five percent tariff, Alana says the company scouted a number
of promising partnerships in India and plan to source about
one hundred new products there, but Trump's tariff on India
has changed that calculation.
Speaker 4 (20:38):
As of today, we're shifting more into Vietnam than we
are into India because there's no long term certainty being
given to us by the administration. We would really love
to manufacture there in broader scale, but economically, it doesn't
make sense for me to manufacture in a location where
it is going to be more expensive than manufacturing in
another location where I can have equal quality.
Speaker 2 (21:00):
I asked Alana about those yoga balls that were rushed
out from Omiitab's factory over the summer. She says the
company has enough stock for Christmas and the holidays, and
perhaps a little more to stretch out inventory into twenty
twenty six, and after that, tell me.
Speaker 4 (21:15):
What the tariffs are, and I can tell you where
I'll make it. But I really can't answer that question
unless I know what my costs.
Speaker 3 (21:20):
Are going to be.
Speaker 2 (21:31):
This is the Big Take, Asia from Bloomberg News. I'm wanh.
This was the second episode in our series following an
American toymaker as it navigates the uncertainty of tariffs. Join
us next time as we go to Vernon Hills outside
Chicago to explore the final chapter. If you like the episode,
be sure to subscribe at Bloomberg dot com, slash Podcast, offer,
(21:52):
leave a review, and even better, tell a friend it
really makes a difference. Thanks for listening. To see you
next time.
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:09):
The morning of August fourteenth, like the start of most days,
on the outskirts of New Delhi, was hectic. Cars jostled
with buses, tooktooks, trucks, and occasional cow as millions of
Indians made their way to work. But for Amitop Carbunda,
that was all a breeze compared to what awaited him
on his factory floor.
Speaker 3 (00:31):
That was a crazy day. Our team work NonStop.
Speaker 2 (00:34):
Ami tab is the managing director of Sunlord, a manufacturer
that specializes in plush toys. I met a metisfactory in
the city of Noida, just outside of New Delhi, and
he told me about that hectic day.
Speaker 3 (00:49):
That day, I cloked about twenty nine thousand steps he's
an average of ten thousand.
Speaker 2 (00:57):
Most of Sunlord's toys end up in American homes, Teddy
Bears and Disney's Elsa Princess dolls for Walmart, nursery products
for Pottery Barn and West Elm.
Speaker 3 (01:08):
This is the packing area of metal detection was coming.
Speaker 2 (01:13):
His factory was racing to get a container of kids
yoga balls covered in plush fabric, assembled, packed and shipped
out fast. This was the very first order for a
new customer, American toymaker Learning Resources, and they had two
days to make it happen. But some lord's deadline wasn't
(01:36):
set by their new customer. It was put in play
by the White House and President Donald Trump.
Speaker 4 (01:42):
The White House making a move to slap of fifty
percent tariff on imports from India. White House trade advisor
Peter Navarro cranked up pressure on India to halt its
purchases of Russian oil.
Speaker 2 (01:54):
Earlier this year, India seemed like a safe bet. President
Trump and Indian Prime Minister render Amodi were developing what
seemed like a romance. Modi visited the White House in February.
Many businesses thought India would be one of the first
countries to strike a new trade deal with the US.
Speaker 4 (02:12):
The government had kind of said, you know, this is
going to be a safe place to manufacture. This is
one of our priority countries.
Speaker 2 (02:18):
Elana Woldenberg Ruffman is vice president of product development for
Learning Resources, based outside Chicago. We met earlier this year
when I traveled with her to visit factories in Vietnam.
Speaker 4 (02:29):
We really started to amp up our efforts to expand
our presence within India. The fact that the tariffies in
India changed with like four weeks notice has real implications
on real businesses like US.
Speaker 2 (02:43):
Like many US companies, Learning Resources has been looking to
reduce its reliance on China since Trump's first trade war.
But when Trump took office this year and began ramping
up tariffs with the aim of raising money and bringing
manufacturing back to the US, that put the China end
of the supply chain under pressure. It pushed Learning Resources
(03:04):
to accelerate its plans to shift its supply chains elsewhere,
to Vietnam and to India, to companies like sun Lord.
But then Trump surprised India and slapped its goods with
one of the highest terraff freights facing any major manufacturing country.
India has been a good friend, but India has charged
basically more tariffs and almost any other country, And for
(03:27):
sun Lord, that meant the pressure was on.
Speaker 3 (03:31):
So the goods need to be in the stores by
first of October for the Christmas sales.
Speaker 2 (03:38):
With tariffs doubling, Learning Resources asked Omiitov's factory to speed
up production. His team worked into the night, pushing fifteen
thousand pieces through final assembly and packing that shipment barely
made it out, and we slayed it to land in
the US one day before the higher tariffs went into effect.
Speaker 3 (03:56):
Whatever was before twenty seven dougars was twenty five percent
a ship novice fifty percent.
Speaker 2 (04:02):
When you're an American company sourcing products half a world away,
there's already enough uncertainty to contend with. Tariffs don't just
add cost, they add chaos.
Speaker 4 (04:12):
The boat ended up getting checked in six hours too late,
so the shipment had a fifty percent tariff instead of
a twenty five percent tariff.
Speaker 2 (04:19):
That costs the company fifty thousand dollars.
Speaker 4 (04:23):
The cost of those terraffs is entirely something that we,
as an organization have to pay. It is US, an
American business.
Speaker 5 (04:29):
That had to pay those tariffs.
Speaker 4 (04:31):
The irony of it is, had we left it in
China and eliminated all the work of finding a new factory,
moving it, the product, training, the factory testing, et cetera,
it would have been cheaper.
Speaker 2 (04:54):
This is the big take Asia from Bloomberg News. I'm wanha.
Trump's tariff war with China was supposed to create an
opportunity for India, a chance to become the world's next
factory floor, but then the White House changed its mind.
Today in the show, I traveled to India and go
inside the factory scrambling to adapt to Washington's tariff whiplash
(05:18):
and get a ground view of the uniquely Indian solutions
to build a manufacturing powerhouse without China And every lunch,
I met Sun Lord's factory in an industrial park outside
(05:40):
New Delhi known as Neuda Toy City.
Speaker 3 (05:42):
Bloomberg New channelna.
Speaker 2 (05:45):
Amitap Karbunda is introducing me to his father, eighty one
year old Ashak Karbanda.
Speaker 5 (05:50):
Papa, Hello, sir. She is from Bloomberg.
Speaker 2 (05:55):
Ashak founded Son Lord in nineteen seventy nine. Back then,
the company made women's clothing and decor like curtains and
cushions for export. Amitop built out the company's toy sector,
which now makes up the bulk of the business. Ashak
still serves as chairman, overseeing the company's finances and comes
into the office most days. Father and son often eat
(06:17):
lunch together in the office's homie kitchen.
Speaker 3 (06:20):
This is Lentil's. Normally are Lentil's and gravy, but this
is where I formed the speciality the family. The city
cotta cheese and this is potatoes.
Speaker 2 (06:32):
Amiitop joined the business after college with a degree in
chemical engineering. Over lunch, he shares that his own son,
representing the family's third generation, will soon be joining the company.
Speaker 3 (06:43):
He studied economics here in India and then the US
he did his master's in sustainability management.
Speaker 2 (06:50):
It occurs to me that most of the toymakers I've
met during this journey are family businesses. The Chicago toymaker
I've been following learning Resources is run by the found
under's grandchildren and great grandchildren. For decades, it's relied on
Chinese manufacturers, who are also family owned. In Vietnam and
here in India, the toy industry is dominated by companies
(07:12):
passed down from generation to generation. It's part of the
reason the US trade war is so devastating. The mom
and pops here lack the deep pockets of major corporations.
As a terra regime changes pivoting won't come easy.
Speaker 6 (07:27):
The kind of uncertain day we are facing now, I've
never faced it in my life, un certainly, which is
totally out of your controling.
Speaker 2 (07:38):
In Today, sun Lord employees about nine hundred workers in
three factories. It specializes in bespoke nursery items like crib
bedding and fabric toys.
Speaker 3 (07:47):
This Christmas decord for one of the Williams Sonoma brands,
which is that Disney Range Disney Design Custmos dech Cord.
It's a snoopy ye.
Speaker 2 (08:02):
When Trump briefly raised tariffs on China to one hundred
and forty five percent earlier this year, Ami Toob was
inundated with phone calls and emails. His factory was already
running full, so he's only been able to take on
a few new clients. One of those was Learning Resources,
which ordered the yoga balls. They're covered with colorful furry
(08:23):
animal faces unicorns, penguins, and puppies, and they'll be sold
in Walmart stores for the Christmas holidays. But after that
first rush shipment in August, things have stalled.
Speaker 3 (08:34):
It was a plan for a second order, but that
has now been postponed.
Speaker 2 (08:38):
Omiitob says Learning Resources has put about two dozen other
products it was exploring with this factory on hold too.
New orders from existing customers have also been pared down,
and instead of growing fifteen percent this year as planned,
the company will be lucky to even see a three
percent growth.
Speaker 3 (08:55):
There's a lot of unpredictability. You don't know what's going
to happen tomorrow. In the short term, new investments, new
products are a bit on hold.
Speaker 2 (09:07):
It's a pattern playing out across India's burgeoning toy sector.
India's higher tariffs on goods to the US put it
at a disadvantage. Both China and Vietnam have struck better
deals with lower levees, and the weight of India's sky
high tariffs is causing pain in the country's biggest industrial hubs.
Speaker 1 (09:27):
We produced two hundred thousand darts every day.
Speaker 2 (09:30):
That's VIJENDERA. Babu, the founder of Microplastics, the largest toymaker
in the country. I've flown to Bengalore, one thousand miles
south of New Delhi to tour Vigendria's plant. The factory
is huge, six hundred and fifty thousand square feet of
manufacturing space that stretches over more than eleven football fields.
Speaker 1 (09:50):
This three is apply to Walmart completely.
Speaker 2 (09:53):
The plant looks busy with hundreds of workers assembling NERF guns,
paw patrol cars, and Little Tykes baseball sets, but Viajendra
says the factory isn't anywhere near capacity.
Speaker 1 (10:05):
We are in still end of September, supposed to be
a very, very peak season, but you can see still
it is a bit slow.
Speaker 2 (10:12):
I really come to understand how badly tariffs have hit
his business when he shows me the plant's warehouse and
it's eerily quiet. The storage area is as big as
five Olympic sized swimming pools, full of products that were
pulled off the production lines after Trump slapped that fifty
percent tariff on India.
Speaker 1 (10:33):
All these are waiting to be fully assembled now and
then to be shipped because of the older stoppages or
out of cancelation. So we are just trying to store here,
so different toys, different parts of toys. You can see
in thousands and thousands.
Speaker 2 (10:47):
It is that during our tour he gets on a
video call with one of his two other factories and
shows me an even bigger warehouse with racks stacked full
of finished products, not.
Speaker 1 (10:58):
Eating, frusture, eating future, hacked and ready to go, everything done,
fact and ready to be shipped.
Speaker 2 (11:03):
As much as a quarter of the factory's orders have
been put on hold or canceled. Thegender estimates the factory
might be stuck with as much as twenty million dollars
worth of goods. Then there's the loss of new business,
which he says represents as much as fifteen million dollars
all on pause. Like Omitop, the gender started the year
(11:24):
with an ambitious growth plan. Forty percent existing customers were
already looking to move products from China. New clients wanted
to place orders, so he built a new three hundred
thousand square foot facility to prepare for the new demand.
Speaker 1 (11:38):
His plant is completely ready. We should have opened and
we should be getting the machines in next two months now.
But now we are also waiting. Should we order those machines?
Should we weight and watch? So we have taken addation
to wait and watch.
Speaker 2 (11:49):
Now with so much uncertainty, where does India's toy industry
go from here? And can President Trump's tariffs really bring
toy manufacturing back to the States. That's after the break. Wow,
(12:25):
it's huge in here.
Speaker 1 (12:26):
It's a six hundred and fifty thousands coudfoot plant. You'll
have good about of walking today.
Speaker 2 (12:32):
In a corner of the massive microplastics factory outside Bangalore,
the sound of heavy machinery fades away. Vijender Baboo, the founder,
brings me to the second floor. Here, the facility's industrial
scale gives way to delicate artistry.
Speaker 1 (12:49):
It's like going to a beauty salon to get those hairstyles.
Speaker 2 (12:54):
And it really is like a salon for tiny dolls,
and it requires all the expertise of a team of
highly trained hairdressers, only in miniature. I watch you worker
handle the first critical step hair rooting. He holds a
bald plastic doll head up to a machine. As he
rotates it, needles punch fine blonde strands with rapid fire speed.
(13:18):
In seconds, the doll goes from bald to having a
full head of shimmering hair.
Speaker 1 (13:22):
Like hair transplantation.
Speaker 2 (13:24):
You know, you can see that that is very much
like a hair transplant.
Speaker 1 (13:28):
You can see.
Speaker 2 (13:30):
Then the real magic happens. I watch as dozens of
women transform these wild manes into bobs, wavy curls, high ponies,
and elaborate braids.
Speaker 1 (13:41):
Yeah, you see the different styles there. It's very difficult
to do it by machine.
Speaker 2 (13:47):
Watching these rows of skillful stylists, I realize this is
where India's manufacturers have a true advantage over the rest
of the world. Even today, you can't automate a tiny,
perfect front braid you need human hands, I asked Vijendra
if he thinks this kind of toy manufacturing can be
done in the US.
Speaker 1 (14:08):
It's not that it can't be done, obviously, but it's
all about the cost. Machines can manufacture these things, but
then there's a lot of decoration, a lot of printing,
a lot of plush which requires stuffing.
Speaker 2 (14:22):
This reliance on skilled human hands reveals the flaw in
Trump's promise to bring manufacturing jobs back to the US.
These workers here make about twenty three thousand rupees a
month or about two hundred and fifty dollars. Americans can't
live on wages that low, so if these toys were
made in the US, one of two things would have
(14:42):
to happen. Either wage costs would rise, pushing the price
of these toys to unaffordable levels and driving the manufacturer
out of business, or the entire process would need to
be automated. This leaves the world's toy makers in a bind.
They can't stay in China and in the USA is
out of reach for low cost, low margin products. The
(15:04):
world needs a new workshop, a place with millions of
workers ready to step onto the assembly line. Could that
place be India.
Speaker 5 (15:13):
I believe this is India's moment.
Speaker 2 (15:16):
Manugupta is chairman of the Toy Association of India, a
trade group for the manufacturers and dealers in the country.
Speaker 3 (15:23):
This industry has the potential to become the next extile
of the government innistry for India.
Speaker 5 (15:28):
Entrepreneurs are here ready when willing to invest. An ecosystem
has been created.
Speaker 2 (15:34):
Prime Minister Mody is certainly betting that India can become
the world's next toy factory. In twenty twenty, he launched
the National Action Plan for Toys to try and capture
a slice of the one hundred billion dollar global toy market.
Mody's blueprint includes strict safety controls for all toys sold
in India and ironically, a seventy percent tariff on imported toys.
(15:57):
That's all designed to keep foreign competitors, namely China out.
Companies like Learning Resources see a lot of advantage in
India's scale and unlike Vietnam, where wages are rising as
factories compete for a smaller pool of workers, the size
of India's workforce keeps labor costs low, and Gupta of
(16:18):
the Toy Association says the country's manufacturers are playing the
long game.
Speaker 5 (16:23):
A lot of companies understand and consider that these tariffs
are not going to stay for too long. You need
to prepare India and their manufacturers so that whenever these
tariffs come down, they become an alternative to what they're
buying in China of Yourtama Indonesia.
Speaker 2 (16:41):
Preparing India's toy industry will require some big changes. Modi's
National Action Plan has shut out foreign producers, but local
manufacturers have been making toys mainly for domestic consumers. A
lot of learning Resources says this means most Indian factories
aren't yet making good with a quality that international buyers demand.
Speaker 4 (17:03):
I think really the next big thing is just going
to be adjusting the factories to align to Western standards,
so quality standards, timelines, all those sort of little details
that come with working with a new partner.
Speaker 2 (17:19):
Alana sees India's potential, but right now it's still a
tiny player in a massive market. India sold about one
hundred million dollars worth of toys to Americans last year. China,
on the other hand, sold eleven billion dollars worth in
Vietnam three billion. Still as Trump's tariffs push companies like
(17:40):
Learning Resources to pivot away from China. India's share of
the toy market is growing, but China still dominates the
entire toy making industry. I saw this in Vietnam. Most
of the raw materials used to make toys still come
from China, so does most of the investments and expertise.
Ami toop Karbanda for sun Lord says he'd like to
(18:01):
see more of that Chinese capital and influence in India.
Speaker 3 (18:06):
To be the best, we have to learn from the best,
right and right now.
Speaker 2 (18:09):
China is the best in this, but thanks to deep
rooted tensions between India and China, it's hard to develop
ties to Chinese entrepreneurs and to Chinese capital. Omitob says
that's forcing entrepreneurs like him to come up with their
own uniquely Indian solutions. At sun Lord's plant outside New Delhi,
(18:32):
Omitob shows me one particularly expensive pain point for toymakers.
Speaker 3 (18:37):
This is a two head laser cutting machine with an
overhead camera. This is an elephant being cut. There you
see there, you be hears. The tail is the body
of the elephant.
Speaker 2 (18:50):
Elephant ears and trunks have been stamped onto the gray
plush fabric, a red laser being cuts the fabric, leaving
a thin trail of smoke. Machines like this laser cutter
cost the kind of money that few Indian factory owners have.
Omiitob solution is to start a joint venture with two
of his biggest competitors.
Speaker 3 (19:12):
One plus one normally means in mathematics it translates to two.
Speaker 2 (19:16):
Tarun Chiitwani owns a toy factory just up the road
from some lord's facility, but in.
Speaker 3 (19:22):
Terms of manufacturing activities and all that, one plus one
translates to eleven.
Speaker 2 (19:27):
Tarun Omitob and a third partner are opening a facility
together next door to Tarun's toy factory. It will run
twenty four to seven, the first laser cutting facility of
its kind in India, and they're also planning a new
factory with more than three hundred sewing machines. In the past,
these three entrepreneurs would have been rivals.
Speaker 3 (19:47):
Not today, we're not competing against each other. Our objective
is to get business into India.
Speaker 2 (19:55):
And as they wait for India to clinch a better
deal with Trump that would lower the high tariffs, they
have to come up with alternative strategies.
Speaker 3 (20:03):
Plan A, tariffs are going to go away. We're going
to be back to normal. Plan B we need to
start expanding the market, look at other options. Plan C
we have to focus on the Indian market.
Speaker 2 (20:17):
Back in Chicago, Learning Resources has learned to be flexible too.
Earlier this year, with China facing one hundred and forty
five percent tariff, Alana says the company scouted a number
of promising partnerships in India and plan to source about
one hundred new products there, but Trump's tariff on India
has changed that calculation.
Speaker 4 (20:38):
As of today, we're shifting more into Vietnam than we
are into India because there's no long term certainty being
given to us by the administration. We would really love
to manufacture there in broader scale, but economically, it doesn't
make sense for me to manufacture in a location where
it is going to be more expensive than manufacturing in
another location where I can have equal quality.
Speaker 2 (21:00):
I asked Alana about those yoga balls that were rushed
out from Omiitab's factory over the summer. She says the
company has enough stock for Christmas and the holidays, and
perhaps a little more to stretch out inventory into twenty
twenty six, and after that, tell me.
Speaker 4 (21:15):
What the tariffs are, and I can tell you where
I'll make it. But I really can't answer that question
unless I know what my costs.
Speaker 3 (21:20):
Are going to be.
Speaker 2 (21:31):
This is the Big Take, Asia from Bloomberg News. I'm wanh.
This was the second episode in our series following an
American toymaker as it navigates the uncertainty of tariffs. Join
us next time as we go to Vernon Hills outside
Chicago to explore the final chapter. If you like the episode,
be sure to subscribe at Bloomberg dot com, slash Podcast, offer,
(21:52):
leave a review, and even better, tell a friend it
really makes a difference. Thanks for listening. To see you
next time.
Hosts And Creators
Sarah Holder
Saleha Mohsin
Popular Podcasts
Las Culturistas with Matt Rogers and Bowen Yang
Ding dong! Join your culture consultants, Matt Rogers and Bowen Yang, on an unforgettable journey into the beating heart of CULTURE. Alongside sizzling special guests, they GET INTO the hottest pop-culture moments of the day and the formative cultural experiences that turned them into Culturistas. Produced by the Big Money Players Network and iHeartRadio.
The Joe Rogan Experience
The official podcast of comedian Joe Rogan.
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.