Flat-pack Swedish retailer Ikea is moving forward with plans to launch its first store in India early next year, reflecting a move in India towards welcoming more foreign retail brands.
Its first store is under construction in Hyderabad in south India. This month, it also started building work on a 10 billion rupee store in Mumbai.
Ikea is aiming to open 25 stores in India by 2025.
Ikea’s move reflects an improved environment for foreign investment in the country, as companies look to tap India’s expanding middle class and strong economic growth.
On Wednesday, India’s government approved plans to scrap the Foreign Investment Promotion Board in an effort to further ease the process for foreign direct investment.
Ikea first applied to open stores in India a decade ago. But it took until 2013 for Ikea to firm up plans to enter the country because of earlier regulations that prevented full ownership for foreign single-brand retailers in India.
Mint, an Indian business newspaper, on Tuesday reported that an unnamed government official had said that the government is thinking of allowing 100 per cent FDI in multi-brand retail, currently capped at 51 per cent.
Ikea has said that it plans to double its product sourcing from India by 2020 to €600 million (Dh2.46 billion) for its Indian and worldwide stores.
Its Mumbai store, in Navi Mumbai just outside of the main city area, will be spread across 430,000 square feet and will have a 1,000-seat restaurant serving Swedish and Indian food. The chain is targeting a 2019 launch.
Each of the stores is expected to directly employ about 700 workers.
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