Ikea says will invest US$300m in northern India

[NEW DELHI] Ikea on Tuesday said it would invest nearly US$300 million in a north Indian state as it forges ahead with plans to start selling its low-cost furniture in the giant market next year.

The Swedish flat-pack behemoth said it had signed a memorandum of understanding with the state of Haryana, which neighbours the capital New Delhi, with a view to opening stores there.

Ikea said it would invest 20 billion rupees (US$297 million) in the state, hire 1,000 workers directly and employ a further 3,000 indirectly in services such as furniture assembly and delivery.

Although it sources some of its materials in India, Ikea does not currently have any shops in the country.

It has announced plans to open its first stores in 2017, hoping to win over consumers in the vast market of 1.2 billion, targeting urban dwellers with rising disposable income.

"Haryana is a prioritised state for Ikea due to its open investment climate," the group's India chief executive Juvencio Maeztu said in a statement.

Ikea has already signed memoranda of understanding with several other Indian states, with the first store slated for the southern IT hub of Hyderabad in the summer of 2017.

Haryana was hit by unrest last month, with 28 people dying in caste protests that temporarily cut off part of the water supply to the capital.

AFP