Ikea, the world’s largest furniture retailer, moved one step closer to opening its stores in India after it signed an agreement with the Indian states of Karnataka and Telangana on Wednesday, according to media reports.
The memorandum of understanding, or MoU, signed with the two states details the prerequisites that the Swedish company needs in terms of infrastructure, Reuters reported, citing unnamed Ikea officials. Ikea will also invest nearly $82 million in the southern state of Karnataka for the development of a supply chain infrastructure and new stores, according to a report by The Times of India, an Indian daily.
“We feel very positive about the developments so far, but it is too early yet to say when the first store will open,” Juvencio Maeztu, head of Ikea’s operations in India, told Reuters, adding that the location of the company’s first stores had not been determined yet.
The Telangana state government, however, said that Ikea had decided to open its first store in India in the state's capital of Hyderabad, according to a report by the Press Trust of India, or PTI, an Indian news agency.
“The decision by Ikea to set up its first store in Hyderabad will place Hyderabad on the international map of Ikea stores. Ikea retail outlets have a standard design and each location entails an investment of $100 million. In addition, the backward integration of supplier linkages will have tremendous economic impact to the state,” according to a state government press release cited by PTI.
Ikea, which has over 350 stores across more than 40 countries, is one of the first foreign companies to get the Indian government’s approval to begin a fully-owned business in the $500 billion retail market in India.