IKEA is going all-in on India.
The Swedish furniture giant just announced it’s more than doubling its investment in the country to over 200 billion rupees around $2.2B over the next five years, as it tries to reignite growth after back-to-back years of declining global sales.
It’s not just a store expansion story either. This is IKEA quietly building a new manufacturing hub for the next chapter of its global business.
India is becoming IKEA’s growth engine
IKEA only opened its first India store in 2018, but the market is scaling fast. Online orders already make up over 30% of IKEA’s total India sales.
Now it wants to go from 6 stores to 30, basically quintupling its physical footprint.
That’s a big bet on India becoming one of IKEA’s most important markets, not just “another country on the map.”
The global business has been slipping
This isn’t IKEA expanding from a position of dominance. It’s expanding because the last two years have been ugly.
In November, IKEA reported global retail sales fell to €44.6B in fiscal 2025, marking the second straight year of revenue declines. That’s about $52B. Down again.
The only other time its revenues meaningfully faltered over the past two decades was 2020, when the world got locked indoors.
That’s what makes this move notable. IKEA is trying to force the next growth wave instead of waiting for it.
IKEA still needs people to get lost in the maze
Even with e-commerce growing, IKEA is still an in-person machine.
Its intentionally labyrinth store layout still works: IKEA sells around 69% of its merchandise inside physical stores.
So while online demand in India is strong, the real growth plan here is still physical expansion. More stores, more foot traffic, more carts filled with stuff customers did not plan on buying.
So why India, even with tariffs?
Here’s the interesting part: IKEA is expanding hard into India even though US tariffs on India are currently extremely high at 50%.
But the bigger picture is simple.
India has:
a fast-growing middle class
cheaper labor and production costs
rising manufacturing capacity that global giants want to tap
IKEA is basically following the same macro path as Apple and other electronics manufacturers: build more in India, produce cheaper, scale output, and ride the country’s export momentum.
Even with tariffs, India’s exports still grew about 20% year over year in November, driven largely by demand from the US and China.
Bottom line
IKEA doesn’t just want to sell more furniture in India.
It wants India to become a core growth market and a serious manufacturing base, right as its global sales engine has started sputtering.
The company is betting the next IKEA boom is going to be built in India.