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Budget 2020 : Ikea is not happy with Sitharaman’s budget

More custom duty from furniture to kitchenware: Multiple duties singe Ikea

New Delhi: A ‘disappointed’ Ikea said it was evaluating the impact of the government’s move to raise import taxes on a host of products, from furniture to kitchenware, on its overall business in India.

Ikea is disappointed with the customs duty hike announced in the Union Budget, which impacts furniture and many other home furnishing categories,” said Peter Betzel, chief executive, Ikea India.

Finance Minister Nirmala Sitharaman announced raising custom duties on wooden furniture, tableware, kitchenware, and toys, among other products. The Swedish retailer currently imports about 75% of its products.

Import duties were doubled to 20% on various types of kitchenware and tableware, while furniture items would now attract 25% customs duties, from 20% earlier.

Ikea also sells a sizeable portion of toys on which customs duties have been raised from 20% to 60%.

The Swedish giant is still evaluating the quantum of increase in prices, but a source told leading newspaper that price hikes on products affected by customs duties are imminent.

“We have a long-term and ambitious growth and investment plan and an open and stable policy regime is crucial for long-term investors,” Betzel said.

“To maximise local sourcing from India is our very important priority in India, and we would like to continue collaborating with the government to create the right ecosystem.”

Ikea is planning to open its second flagship outlet and two smaller version stores in Mumbai later this year. In 2013, Ikea received approval to invest Rs 10,500 crore in the country to open 25 large outlets.

Lately, Ikea store plans for India have changed as it now also plans smaller outlets in city centres.

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