ST. PETERSBURG, RUSSIA - Sweden-based single brand furniture retailer IKEA’s CEO Mikael Ohlsson met the Union Minister of Commerce, Industry and Textiles Shri Anand Sharma in St. Petersburg today to confirm that they will be investing in India to the tune of Euro 600 Million (approximately Rs. 4200 crores) in the first stage and additional estimated FDI of upto Euro 900 Million (approximately Rs. 6300 crores) totalling to estimated Euro 1.5 billion (approximately Rs. 10, 500 crores) for initial establishment of twenty-five retail stores in a wholly owned subsidiary.

The CEO also communicated their decision to raise existing sourcing for their global operation from India significantly. After meeting the global CEOs, Shri Sharma said that despite the problems in global economy and recent lowering of the rating outlook, investors’ confidence in India remains robust. Shri Sharma also informed that IKEA had certain reservations about sourcing norms which were discussed with the DIPP officials; suitable answers of which were provided leading to the decision to invest.

Shri Sharma who is in St. Petersburg for International Economic Forum (SPIEF) also met Mr. Olaf Koch, CEO and Chairman of the Management Board, METRO AG yesterday, who expressed happiness over the performance of their investment in India and apprised the Minister about the expansion plans in India. He also informed that soon they will raise the number of their stores from 10 to 16 in the country.

Earlier, Shri Sharma met Mr. Andrey Belousov, Russian Minister of Economic Development and Mr. Denis Manturov, Minister of Industry & Trade, Russia, on the sidelines of the St. Petersburg International Economic Forum 2012.

During the meeting with the Russian Ministers, Shri Sharma expressed his views that the first step for Comprehensive Economic Cooperation Agreement (CECA) with the Customs Union (CU) countries can be taken after Russia’s accession to World Trade Organisation (WTO) by setting up of a Joint Study Group (JSG). Shri Sharma 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 1 January, 2010. The above three countries took their economic integration one step forward on 1 January 2012, with the implementation of the Common Economic Space (CES) which provides for free movement of goods, services, people and investments.

Shri 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 target bilateral trade figure of US$ 20 billion by 2015. The bilateral trade between India and Russia in 2011 was in the range of US$ 9 billion.

Have something to say? Share your thoughts with us in the comments below.