New Delhi’s move to liberalize foreign ownership has paved the way for foreign companies to enter into the Indian market, including the potential for a landmark investment from the IKEA group. But the Swedish furniture giant says it is no rush to set up shop.
IKEA sought permission in June for a $1.9 billion investment which is now in the final stages: securing the Indian government’s approval to start setting up 25 stores across the country. IKEA’s India chief Juvencio Maeztu told the Wall Street Journal that the group’s priority is to get a “better feel” of the market.
“We are not going to rush. We are not going to set up too many stores in a short span of time. That is not our goal. Or goal is to develop a long-term approach for India,” Mr. Maeztu said. He claimed he has been meeting with people in their homes to “get a flavor of the Indian market” and “understand how they live, what they need”.
Under New Delhi’s previous investment policy, foreign ownership was restricted to 51% of retail operations. The government eased the regulation to 100% following concerns for foreign investors’ sagging sentiment. Further reforms were outlined by the government in an attempt to bolster the country’s investment climate and drive the economy amid a grim outlook from the IMF.
