(Commonwealth_India) Amid increasing global geopolitical tensions and shifting trade dynamics, Swedish furniture powerhouse Ikea is deepening its strategic investment in India, signaling its intention to establish the country as a critical hub for both domestic operations and international supply chains. The company has already cultivated a robust network of nearly 40 home-furnishing suppliers across India and is actively exploring avenues to broaden this supplier base. The aim is to significantly ramp up procurement activities in the region, reinforcing its commitment to long-term growth and supply chain resilience.
Christina Niemela Strom, the global head of sustainability for supply at Inter Ikea Group, highlighted in a recent interview with The Times of India that Ikea is looking to source more products from India “wherever possible.” According to Strom, the company’s objective to boost local sourcing from around 30% to 50% by 2030 is not just a move to strengthen its presence in the Indian market. Rather, it reflects a broader vision in which India becomes a more prominent pillar in Ikea’s global supply network. Strom emphasized the importance of a resilient supply footprint amid growing global uncertainties and noted that India’s strategic position and capabilities make it an ideal candidate to play a key role in that vision. She further added that although the 50% sourcing target primarily pertains to local Indian operations, it is expected to naturally extend opportunities for Indian-made products to reach global markets.
At present, Ikea’s annual procurement from India stands at approximately 400 million euros. A considerable portion of this figure is tied to global exports, given the company’s relatively recent foray into Indian retail, which began in 2018. Despite this recent retail presence, Ikea’s relationship with India stretches back nearly five decades, during which the country has emerged as one of Ikea’s top ten sourcing destinations globally. The company’s export portfolio from India is primarily composed of finished goods such as rugs, bed linens, and curtains. This long-standing procurement experience forms a strong foundation for Ikea’s current and future strategies involving India.
The evolving global trade environment is also a significant consideration in Ikea’s approach. Strom acknowledged that developments such as a potential Free Trade Agreement between India and the United States could open new avenues and influence the company’s strategic choices. Ikea is closely monitoring these trade negotiations to optimize its sourcing and distribution strategies in response to any favorable shifts in trade policy. The company is focused on using India not just as a manufacturing and procurement base but also as a launchpad for developing new product categories. These categories could initially serve the Indian market but are envisioned to potentially expand to international shelves. Strom emphasized the strong reputation of Indian-made products, noting that “Made in India has global appeal,” particularly in terms of perceived quality.
Since opening its first Indian retail store in Hyderabad in 2018, Ikea has steadily expanded its footprint across the country and is now present in over 10 cities through a mix of physical stores and e-commerce platforms. This expansion is part of a broader strategy to make Ikea’s products more accessible to Indian consumers while also leveraging India’s manufacturing strengths to support global needs. Globally, Ikea’s supply chain continues to be dominated by Europe, which remains its largest supply base, followed by Asia and the Americas. Notably, in the United States, a significant share of Ikea’s products still originates from international sources, including China.
Even as India grapples with inflationary pressures and economic slowdowns in recent quarters, Ikea has made a conscious effort to maintain price stability for its customers. Recognizing that home furnishings may not always be a priority during uncertain times, the company has taken steps to ensure its offerings remain affordable. Some of the price increases introduced during the COVID-19 pandemic have been reversed to support Indian consumers. Strom reiterated the importance of affordability in sustaining consumer interest and loyalty, particularly in challenging economic environments.
Ikea’s evolving strategy in India reflects a blend of localized responsiveness and global foresight. With a clear focus on strengthening procurement, expanding supplier networks, and developing India as a springboard for innovation and global supply, Ikea is positioning itself not just as a retailer but as a long-term partner in India’s economic and industrial ecosystem.
