Ikea to invest Rs 50 bn in UP over the next few years to expand footprint

The multinational will sign MoU with UP government for opening retail stores

Swedish home furnishing brand, Ikea is looking to invest nearly Rs 50 billion in the Uttar Pradesh market over the next few years to expand its footprint. 

The company is likely to sign a Memorandum of Understanding (MoU) with the Yogi Adityanath government for opening retail stores in the important towns of the state.

On September 24, 2015, Idea had signed a MoU with the UP government during the previous Akhilesh Yadav regime for launching three stores in Lucknow, Agra and Noida, however, things did not move forward. The company had then signed similar agreements with the state governments of Telangana, Maharashtra and Karnataka as well.

Yesterday, UP chief secretary Anup Chandra Pandey directed officials to invite Ikea for giving a detailed presentation regarding its investment roadmap in UP. He mandated industrial development special secretary to coordinate with the multinational for speeding up the matter before the state government’s second proposed ‘groundbreaking’ ceremony in Lucknow for industrial projects totalling about Rs 500 billion.

Ikea had launched its maiden India store at Hyderabad earlier this year and plans to launch stores across big cities going forward.

Meanwhile, UP industrial development minister Satish Mahana told Business Standard that the government was taking steps to expedite all investment proposals, whether big or small ticket. He informed Ikea had urged the state to allow for higher ground coverage area with regards to its proposal investment.

“Since, it is a policy matter, the proposal would be placed before the state cabinet after discussions and taking suggestions. A new policy is likely to be framed in this regard in the next 10-15 days, so that other similar industries also benefit from the incentive,” he noted.

On July 29, Prime Minister Narendra Modi had in Lucknow laid foundation of projects worth Rs 600 billion in UP. Inaugurating the Summit, Modi had also exhorted UP and Maharashtra to compete for emerging as the country’s first trillion dollar economies. These projects were part of the Rs 4.68 trillion worth of MoUs signed with public and private sector companies during the ‘UP Investors Summit’ here on 21-22 February, 2018.

The second ground breaking was slated to be held in December, however, the event is now likely to be held next month due to delays pertaining to land acquisition and clearances. Recently, chief minister Yogi Adityanath had expressed displeasure over slow pace of follow-up for projects. In fact, earlier, the state had announced it would lay the foundation of projects worth Rs one trillion in December 2018.

Modi would be invited for the next groundbreaking ceremony, which would provide a platform to the ruling Bharatiya Janata party (BJP) government amplify its pro-industry and development agenda before the crucial 2019 Lok Sabha poll against the spectre of a joint opposition and anti-incumbency.