Union budget 2020

Analysis of union budget 2020

• While presenting the Union Budget 2020-21, FM Nirmala Sitharaman said the government will hike custom duties on imported furniture from 20% to 25%
• The duty hike will have an impact on IKEA's India business--a key market for the retailer where it has been rapidly s
• Shoring up presence through its stores
• The world's largest furniture retailer, IKEA, on Saturday said it is "disappointed with the customs duty hike (on furniture) announced in the Union Budget 2020-21" and is evaluating the impact of the hike on its furniture and furnishings business.
  On Saturday, while presenting the Union Budget 2020-21, finance minister Nirmala Sitharaman said the government will hike custom duties on imported furniture from the current 20% to 25% to safeguard the interests of India's micro, small & medium enterprises. The FM added that special attention has been given to put measured restraint on import of those items which are being produced by Indian MSMEs with better quality. She stressed that labour intensive sectors in MSME are critical for employment generation. Cheap and low quality imports are an impediment to their growth, the FM said.

  The Swedish retailer that launched its maiden store in India in 2018 imports furniture for its local business from all over the world. It relies on its large global sourcing and supply chain network to sell affordable furniture and furnishing at its over 370 stores globally.

   

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Budget 2020
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Detailed analysis of Union Budget 2020
06:54 PM IST
Mint and EditorG bring you the best coverage of the Union Budget 2020-21. An analysis of Finance Minister Nirmala Sitharaman's budget speech as top economists, industry heads and politicians helps explain how the 2020-21 budget affects India.

Customs hike on furniture disappoints IKEA
Read 2 minutes. Updated: 01 February 2020, 08:28 PM IST
Sunera Tandon
Presenting the Union Budget 2020-21, FM Nirmala Sitharaman said that the government will increase the custom duty on imported furniture from 20 to 25%
The duty hike will have an impact on IKEA's India business - a major market for the retailer where it is rapidly increasing its presence at its stores.

Subject
Budget
The world's largest furniture retailer, IKEA, said on Saturday it was "disappointed by the customs increase (on furniture) announced in the Union Budget 2020-21" and is evaluating the impact of the increase on its furniture and upholstery business .

Presenting the Union Budget 2020-21 on Saturday, Finance Minister Nirmala Sitharaman said that to protect the interests of India's micro, small and medium enterprises, the government will increase the custom duty on imported furniture from the current 20% to 25%. The FM said that special attention has been paid to keep the measured restraint on the imports of goods which Indian MSMEs are producing with better quality. He stressed that labor intensive sectors in MSMEs are important for employment generation. Cheap and low-quality imports are a barrier to their growth, FM said.

The Swedish retailer launched its first store in India in 2018 which imports furniture for its local business from around the world. It relies on its large global sourcing and supply chain network to sell affordable furniture and furnishings at more than 370 stores globally.


The duty hike will have an impact on IKEA's India business - a major market for the retailer where it is rapidly gaining presence online and offline. This depends on selling low-priced products, especially for middle-income households. "We have a long-term and ambitious growth and investment plan and an open and stable policy regime is critical for long-term investors," IKEA India CEO Peter Betzel said in a statement. “Maximizing local sourcing from India is our very important priority in India and we would like to continue to collaborate with the government to create the right ecosystem. As a home furnishings company, we are aligned with housing for all agendas for which affordability is important to many. IKEA is disappointed with the Customs hike announced in the Union Budget 2020-21 which affects furniture and many other home furnishing categories. We are further evaluating the impact of growth on our overall business.