Ikea bets India to be one of top sourcing nations

Hyderabad: After much delay, Ikea is set to open its first store in the country on Thursday but the Swedish firm hopes that India would become a major sourcing destination in future, an Ikea official said here on Wednesday.

“While the store would open tomorrow, Ikea has a long history of sourcing materials, mainly textiles, from India. In future, we hope that India will become one of the major sourcing countries for the company,” Group CEO Jesper Brodin said.

Despite the long history,  India, which supplies almost a fifth of Ikea’s global goods, lags behind China, Poland and Italy.

So when asked about the local sourcing norms, which dictate IKEA must source at least 30 per cent of materials locally within five years of starting operation, Mr Brodin urged the government to not penalise imports rather incentivise sourcing of local goods.

“Our point of view is that it would be better to incentivise local production than to penalise imports. Because it will be the customers who pays for it, and not necessarily drives excellence in production,” he said.

Meanwhile, the Swedish firm, which has ambitions to launch 25 stores across 40 cities by 2025, may have revise its investment figures upwards as its ramps up its presence across the country.

“Of the already approved Rs 10,500 crore, Ikea has already spent around Rs 4,500 crore. About Rs 1,000 crore was invested in the Hyderabad store and the rest was utilised to buy lands,” said Patrik Antoni, deputy country manager at Ikea.  

When pressed Mr Antoni, without divulging much details, said that revising the investing amount upwards might be on the cards.  “When we came in, we were positive about the country. Our sentiments have only grown further due to the surging market sentiments.”