Ikea asks Government to develop a furniture cluster in Kandla

June 8, 2016

Swedish furniture major Ikea has asked the government to develop a “furniture cluster” near the Kandla port in Gujarat, shipping minister Nitin Gadkari told reporters. The company will not set up its own factory in the cluster but would provide designs to Indian companies that do, and shall source products from them.

Ikea is the first foreign company to receive permission to set up its own retail chain in India under the new foreign direct investment policy for single brand retail announced in 2012. The company has been sourcing products from India for almost three decades.

The cluster is likely part of its effort to deepen its engagement with India ahead of the launch of its first store in India in Hyderabad. This can be viewed as a beginning of a new era of better and concrete structure of retail and investment in the industry. This can also pave way for a rise in the sourcing of the furniture from India.