IKEA’s local sourcing to grow from 30% to 50%; Indian suppliers leap to 86% renewable electricity in two years

As companies around the world reckon with their climate impact, IKEA is placing its emissions-heavy supply chain under a microscope. In a significant shift, the company aims to double down

on local sourcing for local consumption. “We want to support our retail expansion in India by going from 30% local sourcing — meaning India for India — to 50% in just five years,” said

Christina Niemelä Ström, head of Sustainability at IKEA Supply. This move is expected to create more local jobs, reduce import dependence, and lower emissions from long-distance

transportation.

Moreover, IKEA’s suppliers in India have increased their use of renewable electricity from 18% in 2022 to 86% in 2024. IKEA has set an ambitious target: to halve climate footprint by 2030

with the base year being 2016. 

The steep jump in renewables has helped IKEA India reduce its suppliers’ climate footprint by 29% between FY16 and FY24, slightly ahead of the global average reduction of 28%. “The India

example has also served as a very good example for many other suppliers and countries to follow,” said Ström, adding that Indian suppliers have often led IKEA’s global sustainability pilots.

IKEA has been sourcing from India for close to five decades and currently procures around €400 million worth of goods annually from the country. The company further aims to double down on

local sourcing for local consumption. “We want to support our retail expansion in India by going from 30% local sourcing — meaning India for India — to 50% in just five years,” Ström said.

This move is expected to create more local jobs, reduce import dependence, and lower emissions from long-distance transportation.

Traditionally strong in textiles, India is now emerging as a sourcing hub for furniture and other categories as well. Most of these goods are exported globally, carrying a “Made in India”

tag to IKEA customers around the world.

Beyond carbon, IKEA’s environmental push in India includes water and logistics as well. “In our textile supply chain, 90% of discharged water is now treated and reused through Effluent

Treatment Plants,” said Ström. This has significantly reduced water withdrawal from local sources, preserving it for community and agricultural use.

In logistics, IKEA is transitioning its India delivery operations to 100% electric vehicles (EVs) by the end of 2025. “We have already achieved 100% EV deliveries in Bengaluru, Hyderabad,

and Pune,” said Ström. The company recently launched its first heavy-duty electric truck in India for long-haul routes and is building supporting charging infrastructure to create ‘green

corridors’ from warehouses to ports.

The company is also working upstream with raw material providers. Through its sustainable cotton initiative, IKEA has enabled over 110,000 farmers in India to adopt farming methods that

reduce pesticide, fertiliser, and water use while improving yields. “The result is more money in the farmer’s pocket, and a better product for us,” said Ström.

Globally, Inter IKEA Group has committed to using only renewable or recycled materials across all its products, which has required rethinking product development from the design stage.

“We’ve seen that integrating recycled content — like in our Indira bedspread, which now uses 50% recycled cotton — can also reduce costs,” Ström said.

The long-term goal for IKEA is to become net-zero by 2050. That requires not only internal changes but a deep engagement with its vast network of suppliers. “Today, India suppliers have

really helped to spearhead some initiatives we have within IKEA. We want all our suppliers to shift as much as possible to renewable electricity, actually to 100%.” Ström said.