The announcement comes along with the opening of the company’s fourth store in Bengaluru on Wednesday — nearly four years after the Swedish retailer first entered the country.
“We need to work on local sourcing, which will help us to lower prices even more. We are working with our own costs to keep them down as much as possible, so that is how we navigate with affordability,” said Susanne Pulverer, chief executive officer and chief sustainability officer at IKEA India.
The company currently sources slightly over a quarter of its products locally, inducing textiles and carpets. In the long term, it seeks to increase that to at least half, expanding local production to include wood-based flatline furniture.
While local production will help counter rising inflation to some extent, the country’s 25% import tax on furniture still, however, remains a sore point for retailers such as IKEA, Reuters reported.
“Import duty has an impact on prices and competition, and it is not a fully open market, but it is a part of doing business,” Pulverer added.