Swedish furniture retailer Ikea has begun discussing with the Uttar Pradesh government plans to open its first outlet in the country. State government officials have offered to provide land at Greater Noida for Ikea with the necessary infrastructure to build on. The stores will include their unique concept of do-it-yourself, where customers would be able to get a whole new experience of assembling their own furniture.
Officials of Ikea India met state principal secretary for infrastructure and industrial development, Surya Pratap Singh in this connection on Wednesday. Jeff Dolin, property manager, Ikea India told Singh, “UP is one of the priority states for us and we will be aiding in growth of whole furniture sector by providing low-cost quality products.”
Ikea had also considered Hyderabad to roll out its Indian investment but the political disturbance in Andhra Pradesh has made it rethink.
At the meeting, Ikea officials showed a short film on their business concept and strategy and assured the state of its commitment to create opportunities for local manufacturers for achieving viability.
“Our expansion in UP will depend upon our experience from the first store,” he is understood to have said.
The Samajwadi party-led UP government, though against FDI in multi-brand retail sector, has welcomed foreign investment in single-brand retail.
Singh told the company officials during the meeting that UP has around 40,000 hectares of land available for industries and investment in industries is welcome, “provided such investment did not affect local businesses negatively.”
Ikea is expected to make an investment of Rs 10,500 crore in the country. The government had, on May 2, approved Ikea’s proposal for setting up home furnishing stores in the country. It is the largest FDI proposal in the single-brand segment ever since the government allowed 100 per cent foreign investment in the sector last year.
The firm plans to set up 10 furnishing and homeware stores in the country over the next 10 years. In the second phase, the company plans to open 15 more stores. Globally, Ikea runs 342 stores employing about 1,54,000 with a turnover of around euros 27.5 billion.
Ikea officials are scheduled to visit Noida and Greater Noida early next month to see the infrastructure and identify appropriate site. For each store the company plans to acquire around 12-17 acres of land. The outlets will include a showroom, a market hall, a self-service warehouse along with a restaurant.
According to a commerce ministry official, the company is understood