It's a condition called Phimosis. Do not retract the skin forcibly. If it results in difficult urination, thin urinary stream, or ballooning of skin during urination consulting Paediatric Surgeon is recommended. If no such symptoms, it can be left for natural correction.
Next Steps
Observation for urinary symptoms mentioned above.
Health Tips
Never retract the skin over the penis forcibly, it will lead to paraphimosis which requires urgent surgical intervention.