New Delhi, Oct 24 (KNN) Noida and Greater Noida in the National Capital Region are on the priority list of Swedish furniture retailer IKEA to open its first store in India, promising a huge outsourcing business opportunity for the small and medium enterprises in the area.
Senior executives of the global home furnishing firm which has committed an investment of Rs 10,500 crore in India, have already met high-ranking officials of the Uttar Pradesh Government in Lucknow. India allows 100 per cent foreign direct investment (FDI) for single brand retailers.
The entire furniture making sector along with home furnishings in the western UP would get a boost since IKEA would be under a policy obligation to source at least 30 per cent of its requirement locally.
“In respect of proposals involving FDI beyond 51 per cent, 30 per cent sourcing would mandatorily have to be done from SMEs/ village and cottage industries artisans and craftsmen,” the Cabinet Committee on Economic Affairs had stipulated when it approved the policy permitting of 100 per cent FDI in single brand retail last year.
While there was a little tweaking of the policy on demand from IKEA, the crux of sourcing remains intact, protecting the interest of the small sector.
There are some traditional home furnishings like Pilakua near Ghaziabad and thousands of artisans making cane furniture in the area. With some training and skill development, IKEA can use their skills for a win: win situation.
“IKEA officials would visit Noida and Greater Noida early next month to see for themselves the infrastructure and identify an appropriate site,” the company statement said.
IKEA presently runs 342 stores in the world. Their stores, spread over several acres of land, comprise showroom, warehouses and a cafeteria.