Ikea in pact for Bengal entry

Bengal Global Business Summit closes on a high note

By Pinak Ghosh & Sambit Saha in Calcutta
  • Published 9.02.19, 1:40 AM
  • Updated 9.02.19, 4:51 AM
  • 2 mins read
  •  
Mamata Banerjee with Amit Mitra at the Bengal Global Business Summit on Friday. Picture by Sanjoy Chattopadhyaya

Swedish giant Ikea has inked a memorandum of understanding with the Bengal government as part of its plans to expand in the country.

At the concluding day of the Bengal Global Business Summit, which the government claimed had managed to draw Rs 2,84,288.33-crore investment, the MoU was signed between Ikea India Pvt Ltd and WBIDC.

Ikea officials said Calcutta was a priority market for the furniture retailer and after the MoU, it will evaluate the business and revenue potential, the investment, employment and location.

“Ikea had approached us earlier and now they have decided to come to Bengal. There is scope for thousands of employment in an Ikea store because of complete vertical integration,” finance and industries minister Amit Mitra said after the conclusion of the fifth edition of BGBS.

The company, according to Mitra, is eyeing middle-income consumers and is keen on a location where public transport is available.

Ikea had earlier written to Bengal chief minister Mamata Banerjee, informing her of its plans to build 1-2 stores. Each store, spread over 400,000 square feet, will require an investment of Rs 1,000 crore, creating 800 direct and 1,200 indirect jobs.

Given the size of the stores, which will require around an 8-acre plot, and the need for public transport, the retailer has to buy land on its own. Asked if the state will facilitate, Mitra said, “There will be nothing outside the rules and regulation. If they want land in our parks, we would give them.”

“Calcutta is one of our priority cities when it comes to establishing Ikea stores. We very much look forward to government support to establish the stores, jobs and to put investments,” David P.W. McCausland, vice-president (property and expansion), Ikea India Pvt Ltd, said at the summit.

“Bengal is an important market for us and we are in talks with the state government to facilitate our expansion plans. The MoU intends to provide clarity on the working methods and ensure a legally and ethically-compliant business environment,” Ikea India spokesperson said in a statement.

Besides Hyderabad and Navi Mumbai, Ikea has land in Telangana, Maharashtra, Karnataka and Delhi/NCR as part of a plan to build 25 stores in India.

Investments galore

The two-day flagship business summit of the Bengal government saw a total of 86 MoUs across different sectors, prompting chief minister Banerjee to call it a “fantastic outcome”.

During her concluding remark, she said 8-10 lakh jobs will be created when the new proposals fructify. “Our focus is to provide job for everyone. While India lost 2 crore job because of demonetisations and hasty implementation of the GST, Bengal reduced unemployment by 40 per cent,” Banerjee said.

She reminded investors that “political stability” was the hallmark of Bengal. “Bengal is the safest and warmest place to invest,” she said.

There was a perceptible change in the response of overseas delegates as 16 ambassadors from countries such as Korea, Italy, France, Poland and Japan participated.

Mitra said Amazon, Alstom, Accor, Capgemini, Schneider and P&G were some of the big companies that participated in BGBS. The state published two booklets, giving details of the ready-to-allot plots in industrial parks and clusters in Bengal.