IKEA to invest Rs 1,800 cr in 3 stores in Maharashtra

Mumbai: The Bharatiya Janata Party (BJP)-led government in Maharashtra on Friday signed a memorandum of understanding (MoU) with the Swedish furniture retailing giant, IKEA, to set up two to three stores. Maharashtra is one of four states, including Telangana, Karnataka and Delhi-National Capital Region (NCR), identified by IKEA to open its stores. One store will need more than eight acres (350,000 square feet). The company is on the lookout for locations in these states.

State Industries Minister Subash Desai told the Business Standard: "Each store IKEA proposes to start in Maharashtra entails an investment of Rs 600 crore. Each store will generate jobs for more than 1,000 people. Maharashtra is one of few states in India supportive of foreign direct investment in single-brand retailing."

The agreement was signed in the presence of Chief Minister Devendra Fadnavis. The company was represented by IKEA India Chief Executive Officer (CEO) Juvencio Maeztu. Industries Secretary Apurva Chandra and Maharashtra Industrial Development Corporation CEO Bhushan Gagrani signed on the government's behalf.

Desai said the investment would give a boost to local small and medium enterprises and the manufacturing sector, as IKEA plans to source 30 to 40 per cent of its materials locally, to contribute to the Make In India and Make In Maharashtra campaigns. "The company is exploring an option to have Maharashtra (Mumbai) as its entry/exit port for both imports and exports. This will further create jobs."

Chandra said the government will help IKEA get clearances through a single window.

An IKEA spokesperson said, "Our priorities are to find the right locations for our stores, to expand our supplier base and to establish long-term relations with authorities and others. In the first phase, we are looking at establishing IKEA stores in Delhi-NCR, Mumbai, Bangalore and Hyderabad. We feel positive about the developments."

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.