IKEA bets on India for affordable furniture innovation

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IKEA has incorporated a product development company in India to create home furnishing products for both Indian and global markets, marking a deeper bet on the country’s manufacturing, retail and design ecosystem. The new centre is IKEA’s fourth such unit globally after Sweden, China and Vietnam, and places India inside the company’s product innovation network, not just its supply chain.

The move matters because India is becoming a larger part of IKEA’s full value chain. The company already sources from India, sells in India, and is now using the market to develop products for India and overseas customers. Oskar Lindkvist, managing director at IKEA Product Development Centre India, told ET: “Retail is here, supply is here, and now product development is here. The full value chain is represented in India now.”

The centre will operate under Inter IKEA Group and work with the group’s design and product development arm in Älmhult, Sweden. Its mandate includes building affordable, locally relevant home furnishing products that can also travel to international markets where demand fits.

The scale is material. IKEA has been tasked with developing 500 products from India; around 150 have already been launched and another 220 are under development. The company sources products worth about €400 million from India annually, according to recent industry reporting, and aims to increase local sourcing for its India business from 30% to 50%.

Linn Roslund, managing director, IKEA Services India, said the product development centre will allow IKEA to work more closely with “the materials and manufacturing capabilities that exist in region.” That is the strategic signal: India is no longer only a low-cost procurement market for IKEA. It is being positioned as a design, sourcing and export platform for affordable furniture and home décor.