After the hike in import duty on furniture in India, Swedish furniture company IKEA is not planning to hike the prices of its products, said Peter Betzel, Managing Director, IKEA India.
"We are disappointed with the import duty hike but we will not hike the prices as then it will not be called affordable," Betzel said on the sidelines of RAI Retail Leadership Summit 2020. "Affordability is so important for us. The hike in import duty will have an impact on the business, our way forward and on our volumes," he added.
Currently, 75 percent of goods sold in India are imported.
In an attempt to boost domestic manufacturing, the Finance Ministry increased import duty on wooden furniture to 30 percent from the current 20 percent.
In the Union Budget 20-21, the Finance Ministry also hiked import duty on, lamps and mattresses from 20 percent to 25 percent.
Betzel said IKEA is in talks with the Indian government on the hike in import duty.
"We had a meeting with the government representatives several times and told them what we would like to do for India and how we could increase local manufacturing. The government is open to help," Betzel said.
When asked about the impact of the coronavirus outbreak on its supply chain, he said IKEA's supply chain was not disrupted.
IKEA, which opened its first store Hyderabad in 2018, will be launching its second store in Mumbai soon.
On the delay in launching the Mumbai store, Betzel said: "In this summer, we are opening the Mumbai store. We had to get licenses and there were some other challenges with some steel construction."
The Stockholm-based company is also looking to open big stores as well as small formats in Mumbai, Delhi and Bengaluru, apart from selling on online platforms.
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