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Ikea to source cotton products from India, including Welspun

businesspaper Updated: Sep 22, 2016 12:33 IST

MUMBAI: Swedish retail giant Ikea will continue to source cotton products from India, including from Welspun, while monitoring developments related to allegations by prominent US retailers that Welspun supplied bed sheets made of a cheaper variety of cotton instead of a high-grade Egyptian variant.

Patrik Antoni, deputy country head for Ikea told HT that it will continue to engage with 100,000 cotton farmers across India, including 9,000 from Maharashtra, to source cotton directly. It will also source various products from textile makers such as Welspun. Ikea doesn’t source Egyptian cotton bed sheets from Welspun.

“We haven’t faced any issue…but you always need to be on your toes and have a strict code of conduct. Welspun is also one of our suppliers and we are monitoring and auditing what’s going to happen. But what we have experienced so far, it (Welspun) has been a good supplier for us,” said Antoni.

As such, Ikea will continue to scale up local sourcing. Under government norms that allowed 100% foreign direct investment in single-brand retail, companies must source 30% of their products from India. Ikea says by 2021, a third of the products it will sell in India will be sourced locally, which will increase to 40% by 2025.

“We don’t just buy raw materials like wood on the market, but go back to the source, and check who is growing it, how much pesticide has been used. We are really careful of the supply chain and that’s why it takes time to get going,” said Antoni.

Ikea has been sourcing from India for the last 30 years. It plans to double sourcing of goods to $600 million (₹4,000 crore) by 2020, from $300 million now.

“If we can succeed here in India, it can change the way we do products even in other parts of the world,” said Antoni.

Ikea’s first retail store in India is set to open in Hyderabad by the end of 2017. The second store will open in Navi Mumbai in 2018.