|Swedish retailer Ikea to invest in India|
|Monday, 25 June 2012 13:16|
Swedish retail chain Ikea plans to invest EUR1.5bn to set up 25 mega stores in India despite its lingering concerns about the country's supply chain regulations. Ikea chief executive officer Mikael Ohlsson met India's Commerce Minister Anand Sharma in St. Petersburg, Russia on 22 June and confirmed invest plans.The furnishing chain will invest through a wholly-owned subsidiary in two stages, EUR600m and EUR900m, to open retail outlets in the country.
In addition, the company said it is eager to set up its first retail store in the nation, subject to approval of Indian government.
The government has thrown open the gates for single-brand retail, hoping that major brands such as Ikea will invest in the country.
Ikea has long eyed India's retail market, but concerns about the country's stringent regulation of foreign retailers had kept it away.
The retailer has also expressed reservations about the requirement, under the new regulations, that foreign firms have to source at least 30% of their products from small industries in the country.
As of August 2011, Ikea had operated 287 stores in 26 countries. The firm's profit grew to EUR2.69bn and revenue rose 8% to EUR23.5bn in the fiscal year ended 31 August 2011.