MUMBAI – Swedish retailer IKEA has applied to invest a total of $1.2 billion to open 25 stores in India, India’s commerce ministry said Friday. IKEA plans to initially invest €600 million, followed by an additional €900 million to create a wholly owned subsidiary in India. The commerce ministry said Friday that IKEA had discussed its concerns with Indian officials and found suitable answers, leading to the decision to invest. IKEA CEO Mikael Ohlsson and Indian commerce minister Anand Sharma met in St. Petersburg, Russia on Friday to seal the deal.
What this means:
Both Starbucks and Ikea had long been on the edge of plunging into the Indian consumer market. Starbucks now expect its first stores to open in Q3 2012 and now the Swedish home furnishings company has taken the plunge. This is an indication that major Western brands consider India as a must-have market and have overcome any regulatory skittishness.
BTW, Anand Sharma, India’s commerce minister is a rising star in politics there. He is eloquent and adroit in both Western and Indian ways. He was also the leader who licensed the hit song from Slumdog Millionaire for his political party’s electoral campaign during the last major national polls in India (and it helped the Congress party and its coaliton partners to build their appeal with less affluent voters)
