IKEA store (REUTERS/Petar Kujundzic)
Uttar Pradesh government on November 25 said it has resolved issues with global furniture major IKEA, and the company can begin work on its Noida project this week. The deal for the store-cum-commercial complex on an 11.8 acre land in Noida’s Sector 51 was signed in 2018 but had been stuck due to land cost payments.
UP Industries Minister Satish Mahana said the land issues have “all been cleared” and the Noida Authority had been directed to ensure quick handover of land to the company. He added that IKEA is committed to finishing the project by 2025, The Times of India reported.
"IKEA has long term commitment for India. Delhi/NCR is one of our biggest and most important markets. We are in talks with the government and relevant authorities for purchasing land in Noida. It is a big project with large investments, and we are still in the process to resolve all aspects to conclude the transaction. As a responsible company, it is important for us to do things the right way for which we are prepared to invest more time if required," IKEA spokesperson said.
Adding more, the company's spokesperson said, "It is IKEA's ambition to meet 100 million people in India in the coming years. We are entering the markets with an omnichannel approach to be more affordable, accessible and sustainable for the many customers. As a modern home furnishings retailer, IKEA will bring best practices from our 75+ years of experience, create employment opportunities, provide skill & competence and increase manufacturing, thereby creating a positive impact on the State, society and the many people."
According to Noida Authority officials, the land deal was for Rs 750 crore and IKEA over the years paid Rs 300 crore, but delays in instalments led to “late payment” penalties being added to the outstanding amount.
“The matter has now been resolved. We have gone through their request and have prepared a fresh payment plan. It will be taken up at the next board meeting for approval,” said Ritu Maheshwari, CEO of Noida Authority said, adding that while certain charges are waived, IKEA will have to pay the land cost premium and prevailing interest rate.
One of the largest in the Delhi-NCR region, the Noida project is only slightly smaller than IKEA’s first Indian store in Hyderabad. The proposed complex – a mix-use project – will consist of two towers (28 storey and 18 storey with basement levels), a hotel, corporate operations, restaurants and food and beverages section.