Ikea will not set up its own factory in the cluster but provide designs to Indian companies that do, and source products from them
Ikea plans to open a total of 25 stores in India by 2025.
New Delhi: Swedish furniture company Ikea has asked the government to develop a “furniture cluster” near the Kandla port in Gujarat, shipping minister Nitin Gadkari told reporters. The company will not set up its own factory in the cluster but provide designs to Indian companies that do, and source products from them.
The Swedish furniture maker, the first foreign company to get permission to set up its own retail chain in India under the new foreign direct investment policy for single brand retail announced in 2012, has been sourcing products from India for almost three decades.
The company has also bought space in Navi Mumbai for a large store.
In its response to an email, Ikea said that it plans to double its sourcing in India and are looking into new and existing categories including furniture as well as how to use sustainable materials such as bamboo, jute and coconut fibre. Already today 45,000 players at 50 suppliers are producing Ikea goods in India. Ikea is aware of the governments initiative and are positive to all actions that will make it easier to source even more products in India. Recently a few new suppliers have been signed on and we are positive to increase our supplier base in India and increase the amount of jobs created in our supply chain.
Gadkari said Ikea has asked the government to develop a furniture cluster on 450 acres near Kandla port. The minister added that he has had talks with the Gujarat government on the issue.
A senior government official familiar with the matter said Ikea would provide the technology and design for the products. It will import wood from Africa and Canada to India, outsource the work of making the furniture to companies in the cluster, and then export their output to its units overseas, the official added, asking not to be identified.
The company plans to open a total of 25 stores in India by 2025.
According to Ikea’s website, Ikea India has been present in the country for 28 years, sourcing many different products for IKEA stores worldwide. It sources products worth approximately €315 million (Rs.2,400 crore) every year and aims to double this over the next few years.
The website added that the company works with 48 suppliers in India.