India Furniture Market – Forecast & Opportunities





“India is new and a very exciting and challenging market. What strikes you is the size, diversity and friendliness in the country, which is also the world’s youngest In contrast to Germany, where people are a lot mature, in India, the openness of people to move and create a new life strikes you.”, Peter Betzel, CEO, Ikea India

Indian Ecosystem/ Demand

India’s unprecedent growth is evident in programs like 'Housing for All by 2022', 100 smart cities, 100% foreign direct investment (FDI) in realty among many others. These programs have been enshrined with the vision of providing a pukka house to every Indian. Such programs coupled with increasing number of foreign tourists over the last years have directly increased the demand in its ancillary and complementary markets, namely the Furniture market.

The India Furniture Market anticipated a CAGR of 13.38% during the period of 2018-2023. The Indian Furniture market has been appreciated and explored by Hong Kong Trade Development Council (HKTDC). The report by HKTDC expected the Indian Furniture Market to grow over $ 27 Bn by 2022, representing a huge opportunity for furniture exporters across Asia.

Due to the dedicated interventions by the Government, it is expected that there would be a surge in demand for the below sub-sectors of furniture:

  • Residential furniture
  • Commercial: office/corporate furniture
  • Hotel furniture
  • Furniture parts

Supply Influencers

India is a desirable destination for furniture players like Ikea because two important pillars. Firstly, affordability and secondly, quality. Additionally, India is rich the factors of production required for manufacturing furniture.

  • Labor: India realises the importance of this market and is already ahead of other south Asian nations. As per the National Skill Development Corporation (NSDC) the industry would require 11.3 Mn skilled workers by 2022. To ensure that the Indian labor is skilled and prepared for manufacturing, skilling initiatives are already being executed on ground.
  • Cluster-based growth: Due to dependence on import of wood, and to make India a more desired location for Furniture exports. India has approached manufacturing furniture in a cluster-based format. Maharashtra, Gujarat, UP, Bihar, West Bengal,  and Kerala are the major hubs of manufacturing Furniture. These locations have their own advantages. For instance, firstly, Maharashtra, and Gujarat are well-connected to seaports which makes importing raw materials, if required, cost effective. Additionally, with the Sagarmala initiative, these states are connected to other parts of the country giving access to large scale Indian market. Secondly, UP and Bihar have cost-effective trained labor and land which are imperative for any industry to flourish. Thirdly, West Bengal is rich in bamboo, and cane which are widely used in the Indian furniture demand and appreciated across the world.

Policy Perspective

The Government of India has been consistently working to strengthen the investment climate in India. India is moving from unorganized furniture markets to a more organised market in nature because of the robust policies.

  • Passed regulations that allowed single-brand companies such as Ikea to open outlets without local partners.
  • 30% local sourcing norm has been eased
  • Allowed foreign multi-brand retailers such as Wal-mart stores Inc. (WMT) and Carrefour SA (CA) to own as much as 51% of retail outlets
  • Imports of furniture were liberalized in April 1998
  • Importers in India require no license or prior permission to import furniture.
  • Importers should have valid IEC (Import Export Code) issued by Directorate General of Foreign Trade

Trade War/Opportunities

In May 2019, USA imposed 25% tariffs on a broad range of Chinese products including lighting and furniture industries. This opens avenues for Chinese furniture manufacturers to move their manufacturing base to India. The potential investor can reap benefits of the following by setting up a furniture industry in India

  • Cost-effective labor in India1 
Daily Minimum Wage ($)
Monthly Minimum Wage ($)
3.42 – 8.59
102.74 – 257.73
7.64 – 8.30
229.11 – 249.03
4.80 – 9.61
144.14 – 288.3
4 – 5.75
120 – 173

With Indian population almost exceeding China, India is one the fastest trillion-dollar economy and therefore, its middle-class consumer market is booming. This inevitably gives an impetus to the domestic furniture and homeware sector. Along with a strong internal market, India is a signatory to 42 Trade Agreements with various countries. Thus, making it a viable choice for both market access and export purposes.