Ikea eyes furniture hub near Kandla port

Swedish home furnishing major Ikea has asked the government to develop a “furniture cluster” near the Kandla port in Gujarat, Road Transport and Shipping Minister Nitin Gadkari has said.

Ikea will not set up its own factory in the cluster but provide designs to Indian companies that do, and source products from them, Gadkari told reporters in New Delhi.

"They want to work on the China like model in India where they set up the ecosystem and develop a chain of vendors through which the finished products would be sourced for the Indian as well as the global market," Gadkari said.

Ikea, which is the first foreign company to get permission to set up its own retail chain in India under the new foreign direct investment policy for single brand retail announced in 2012, has been sourcing products from India for almost three decades.

The cluster is likely part of its effort to deepen its engagement with India ahead of the launch of its first store in India in Hyderabad in 2017.

The shipping ministry is setting up a smart port industrial city near the Kandla port spread over 1,400 acre, of which about 450 acre would be reserved for the furniture cluster. The government is in talks with Ikea to develop that cluster into a world class export centre. Gadkari said he has had talks with the Gujarat government on the issue.

A senior government official said Ikea would provide the technology and design for the products. It will import wood from Africa and Canada to India, outsource the work of making the furniture to companies in the cluster, and then export their output to its units overseas.

Ikea plans to open a total of 25 stores in India by 2025.