Ikea India, a subsidiary of Swedish furniture retailer Ikea AB, on Wednesday signed a Memorandum of Understanding (MoU) with the Telangana government for establishing its store in the state.
In May 2013, the government cleared the proposal of the Swedish furniture major to invest Rs 10,500 crore for setting up single brand retail stores.
"The decision by Ikea to set up its first store in Hyderabad will place Hyderabad on the international map of Ikea stores. Ikea retail outlets have a standard design and each location entails an investment of US $100 million (or Rs 500-600 crore).
In addition, the backward integration of supplier linkages will have tremendous economic impact to the state," a press release from the Government said.
Chief Minister K Chandrashekar Rao while assuring the furniture maker all possible support from the government suggested that Ikea should tie up with artisans in Telangana like Nirmal, Silver Filigri, Pembarti and so on, for their furniture as add on things.
Responding to a request made by Juvencio Maeztu, Ikea India CEO, the Chief Minister has agreed to accommodate their store near one of the Metro retail terminals, the release said.
The Telangana government will support Ikea's investment by appointing the Commissioner of Industries as a single contact point to ensure a speedy, transparent process for all applications, permissions and licences, the statement further said.
Founded in 1943, Ikea is one of the world's largest retailers in furniture, household goods and textiles. It was one of the first companies in India to be allowed 100 per cent foreign direct investment (FDI) in retail under the government's liberalised policy.