IKEA India chief Juvencio Maeztu met Amitabh Kant, secretary, department of industrial policy and promotion, and other officials of the commerce ministry on Wednesday and shared plans to increase sourcing from India. The world’s largest furniture retailer, with revenues of close to euro 29.3 billion, currently sources 315 million euros worth of goods from India and hopes to double this amount by 2020.
The Swedish firm, which has been sourcing products from India for close to three decades, already has 48 suppliers and recently met with another 170 potential suppliers in Mumbai and Bangalore.
“We have shared our plans (with the government) to make more in India. We will increase our supplier base,” Maeztu told reporters after the meeting.
An IKEA spokesperson said the firm would be meeting vendors in Hyderabad soon, adding that the idea was to access new categories. Ikea has been sourcing mostly textiles from India but is looking to broaden the base to include metals, plastic, lighting, wood and bamboo.
The Swedish firm typically has captive suppliers catering exclusively for it needs. So far, most of the products sources are unique to India but popular overseas such as carpets and textiles. China is another big sourcing ground for the furniture manufacturer.
Ikea, a single-brand retailer, is yet to set up shop in India although it has committed to an investment of close to $1.95 billion (Rs 10,500 crore) over a period of time and plans to open 25 stores across the country. The firm has approval for a 100% foreign direct investment entity and the norms say that, in respect of proposals beyond 51%, sourcing of 30% of the value of goods purchased will be done from India, “preferably from MSMEs, village and cottage industries, artisans and craftsmen, in all sectors”.