IKEA Sets Up India Development Center in Push beyond Sourcing
IKEA has established a new entity in India to create products for both local and international markets, marking the fourth product development center in the global network of the world's largest furniture and home products retailer, following those in Sweden, China, and Vietnam, highlighting India's increasing importance as a strategic growth and manufacturing center.
The recently established product development center will belong to Inter IKEA Group and will create home furnishing products and global markets for the group's design and product development division located in Almhult, Sweden.
The relocation signifies a major growth of IKEA's footprint in India, extending beyond retail and procurement. For over forty years, India has served as a sourcing market for IKEA, providing products valued at approximately 400 million each year, the majority of which are exported.
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The newly established company has been assigned to create 500 products that are cost-effective and pertinent for Indian consumers. Approximately 150 products have been launched, with an additional 220 currently in development.
Inter IKEA Group stated that the new entity strengthens its lasting dedication to India as an important market and sourcing area.
The center will aid in creating products that are more aligned with Indian consumers and suppliers by utilizing the nation's manufacturing strengths, local resources, and artisanal skills. The project is tightly connected to Ikea's efforts to enhance local sourcing.
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Earlier this year, IKEA revealed intentions to increase its investment in India to over 200 billion rupees ($2.20 billion) in the next five years, as the furniture retailer aims to launch additional stores and boost local sourcing. IKEA, which launched its initial store in India in 2018 in Hyderabad, a city in the south, will start taking online orders in four additional cities where it lacks a physical presence, such as Chennai and Coimbatore in Tamil Nadu.
The retailer's sales in India increased by six percent to 18.61 billion rupees in the year ending August 2025, and Antoni mentioned plans to increase that amount fourfold, which includes raising the number of stores from six to 30. According to Bhavana Jaiswal, the country e-commerce integration manager, the company intends to initiate online sales prior to launching physical stores in new cities, marking a global first for IKEA, as younger shoppers increasingly prefer online shopping to avoid traffic.
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Its online sales represent more than 30 percent of the overall sales in India. The retailer plans to increase the portion to 40 percent of overall sales. Antoni stated that IKEA will increase production for local stores and exports to 800 million euros ($930 million).
The company's decision aligns with global brands increasing export production in India to reduce expenses, while consumer giants like shoemaker Asics and carmaker VinFast Auto also enhance sourcing to fulfill local demand.