Good news! Despite Modi govt move, Ikea not to hike prices of low-end furniture products

Swedish furniture giant Ikea Sunday said it would not raise the prices of low-end furniture and furnishing products if the company costs increase due to Centre's recent hike in customs duty on some furnishing items to curb imports of non-essential goods.

"For now, we have not seen any repercussions, but if there is continuation of costs due to hike in customs duties on furniture and furnishing items, then at some point of time we would have to pass it (burden) on to customers, but we may do it on higher-end products, not lower-end, Deputy Country Manager Patrik Antoni told PTI here.

"So, customers can still be hopeful," he said.

Patrik said Ikea is a global company and it would appreciate global trade, but would not be happy with trade barriers such as customs tariff or import duties.

He also said trade barriers will only affect 'ease of doing business,' which will, in the long run, affect customers.

The central government had on September 26 hiked customs duties on as many as 19 items, including jet fuel, Air Conditioners and refrigerators, with an aim to curb imports of non-essential goods.

Ikea imports most of the products it sells, and many are covered by the latest customs duty hike which includes tableware, kitchenware and household items made of plastic and travel bags, among others.

The total import bill on account of shipment of such items into the country last fiscal was Rs 86,000 crore.

Curbing non-essential imports was part of the five-pronged steps announced by the government to check widening current account deficit and capital outflows.

Ikea is planning to invest nearly Rs 3,000 crore in the next three years to open three fulfillment centres (packing warehouses) in Mumbai, Bengaluru and Delhi.

The company would open the centres as an omni-channelling brand with large IKEA stores, city centre stores and online presence.

Ikea is set to open its second store in Mumbai later this year and would hold a ground-breaking ceremony on October 11 in Bengaluru.

By 2025, there would be over 25 stores across cities such as Ahmedabad, Surat, Pune, Chennai and Kolkata with both online and offline approaches.