The Sweden-based single brand furniture retailer IKEA’s CEO Mikael Ohlsson recently met the Indian Minister for Commerce, Industry and Textiles, Mr. Anand Sharma, in St. Petersburg to confirm that the company will be investing in India to the tune of Euro 600 million (approximately Rs. 4,200 crores) in the first stage and an additional estimated FDI of upto Euro 900 million (approximately Rs. 6,300 crores) totalling an estimated Euro 1.5 billion (approximately Rs. 10,500 crores) for initial establishment of 25 retail stores in a wholly-owned subsidiary. He also conveyed his decision to raise the existing sourcing for global operation from India significantly.
After meeting the global CEOs, Mr. Sharma said that despite global economic problems and the recent lowering of the rating outlook, investors’ confidence in India remains robust. IKEA has certain reservations about sourcing norms which were discussed with the DIPP officials; suitable answers of which were provided leading to the decision to invest.
Mr. Sharma, who was in St. Petersburg for International Economic Forum (SPIEF), met Mr. Olaf Koch, CEO and Chairman of the Management Board, METRO AG, who expressed happiness over the performance of its investment in India and apprised the Minister of the expansion plans in India and the proposal to raise the number of their stores from 10 to 16 in the country.
Earlier, Mr. Sharma also met Mr. Andrey Belousov, Russian Minister for Economic Development, and Mr. Denis Manturov, Russian Minister of Industry & Trade, on the sidelines of SPIEF.
During the meeting with the Russian Ministers, Mr. Sharma expressed his views that the first step for the Comprehensive Economic Co-operation Agreement (CECA) with the Customs Union (CU) countries can be taken after Russia’s accession to the World Trade Organisation (WTO) by setting up of a joint study group (JSG). He conveyed the urgency to make headway with the proposal for CECA with the Russia-Belarus-Kazakhstan CU, which holds the key to achieving higher trade targets for India.
The Customs Union between Russia, Kazakhstan and Belarus formally came into existence on January 1, 2010. The three took their economic integration one step forward on January 1 last, with the implementation of the Common Economic Space (CES) which provides for free movement of goods, services, people and investments.
Mr. Sharma also said that the level of bilateral trade and investment between India and Russia remains below its potential. He put stress on making sincere and concerted efforts and to take specific measures, including thrust areas, to achieve the targeted bilateral trade figure of $20 billion by 2015.
The bilateral trade between India and Russia in 2011 was in the range of $9 billion.