Ingka Investments, the investment arm of Ingka Group, the largest IKEA retailer globally, has announced its first renewable energy project in India. The company is set to develop a 210 MWp solar installation in Bikaner, Rajasthan, marking a significant step in IKEA's commitment to sustainable energy in the Indian market.

Project Details

Economic Impact

The project is expected to create employment opportunities in the region:

Ingka Investments has acquired a 100% stake in this subsidy-free solar park and has partnered with ib vogt Solar India for the development and construction of the project.

IKEA's Expansion in India

IKEA India continues to expand its presence in the country:

• Plans for larger stores and integrated retail hubs in Gurgaon and Noida
• Focus on local sourcing and leveraging free trade agreements to maintain affordability
• Positioning India as one of its top three strategic growth markets globally

This renewable energy project aligns with IKEA's global sustainability goals and demonstrates the company's commitment to the Indian market. The investment in solar energy not only supports IKEA's operations but also contributes to India's renewable energy capacity.

As IKEA continues to grow its retail footprint in India, this solar project represents a significant step towards sustainable operations and energy independence for the company in one of its key strategic markets.

Swedish furniture giant IKEA has unveiled ambitious plans to significantly increase its sourcing operations from India for its global markets, with a particular focus on core furniture products. The company has set a target to achieve 50% local sourcing for the Indian market by 2030, underlining its commitment to the country's manufacturing sector.

Challenges and Opportunities

Susanne Waidzunas, Global Supply Manager at Inter IKEA Group, highlighted a critical challenge in the company's expansion plans: securing sustainably sourced wood. Waidzunas emphasized the need for supportive government policies to ensure access to raw materials that meet international standards, a crucial factor for growing exports from India.

Current Sourcing and Partnerships

India already holds a significant position in IKEA's global supply chain, ranking among the company's top 10 sourcing markets. Currently, IKEA sources approximately €400.00 million worth of products annually from the country. The company's relationship with India spans over five decades, with IKEA maintaining partnerships with around 40 suppliers. These collaborations have proven to be long-lasting, with an average partnership duration of 11 years.

Expansion Plans in India

IKEA's commitment to the Indian market extends beyond sourcing. The company is currently in its second phase of expansion in the country, following its retail debut in 2018. The expansion strategy includes:

• Opening small-format stores alongside traditional large-format outlets
• Expanding online sales to reach a wider customer base
• Adding four to six customer touchpoints annually

This multi-pronged approach demonstrates IKEA's adaptability to the diverse Indian market and its commitment to enhancing customer accessibility.

Long-term Vision

By targeting 50% local sourcing for the Indian market by 2030, IKEA is not only aiming to optimize its supply chain but also contributing to the growth of India's manufacturing sector. This goal aligns with the Indian government's 'Make in India' initiative, potentially creating more job opportunities and fostering economic growth in the country.

IKEA's increased focus on sourcing from India reflects the country's growing importance in global supply chains and its potential as a manufacturing hub. As the company continues to expand its presence and deepen its relationships with local suppliers, it will be interesting to see how this strategy unfolds and impacts both IKEA's global operations and India's furniture manufacturing industry.