Foreign retail giants like IKEA ‘using predatory pricing to destroy Indian MSMEs’
AIE warns such business models are designed to sustain losses until Indian players are either driven out of business or forced to become suppliers
Chennai, Feb 5: The Association of Indian Entrepreneurs (AIE) has expressed serious concern over the latest financial results of IKEA India, which reported a staggering loss of Rs 1,325.2 crore in FY25 despite recording an operational revenue of Rs 1,749.5 crore, as per reports accessed through regulatory filings.
The Association stated that such numbers are not merely business losses but a clear sign of a predatory market strategy aimed at capturing the Indian consumer market at any cost.
According to the report, IKEA India’s borrowings have risen sharply to Rs 8,335 crore in FY25. AIE noted that this level of borrowing, coupled with continued heavy losses, indicates that the company is operating with deep-pocketed funding support, allowing it to absorb losses for several years to eliminate domestic competition.
“An Indian MSME cannot survive even a few months with such a model. No small business can afford to lose Rs 75 for every Rs 100 of sales. This is not business; this is a planned market takeover,” said K E Raghunathan, National Chairman, AIE.
AIE cautioned that the Indian retail and manufacturing ecosystem, especially micro and small enterprises in furniture, home décor, plastics, fittings, packaging, transport and logistics, is highly vulnerable to such aggressive strategies.
“If an MSME makes a 2-3% mistake, it becomes a sick unit. If a foreign retailer can lose ₹1,300 crore every year and still expand, it is obvious that the playing field is unfair,” the Association said.
Long-term threat
The Association warned that such business models are designed to sustain losses until Indian players are either driven out of business, or forced to become suppliers under unfavourable terms.
Once the market is consolidated and alternatives disappear, the Association fears that foreign retail giants may raise prices by 20–30%, leaving Indian consumers with no choice.
“This is a textbook example of predatory pricing. First they sell cheap and destroy competition. Then they control the market. After that, prices rise sharply. Consumers will suffer, MSMEs will collapse, and lakhs of jobs will vanish,” said Raghunathan.
AIE urged the Government of India to take immediate policy action to prevent what it called an unethical trade war being waged within India by foreign-funded retail players.
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