A Study on Impact of Foreign Direct Investment (FDI) in Indian Retail Sector A Case Study on Ikea

Abstract: Foreign Direct Investment (FDI) has emerged as an important driver of growth and modernization in the Indian retail sector. The liberalization of FDI policies has encouraged the entry of multinational retailers, leading to improvements in infrastructure, supply chain management, customer service, and organized retail expansion. This study aims to analyze the impact of FDI on the Indian retail sector with special reference to IKEA, one of the leading global furniture retailers operating in India. The study is based on a descriptive and analytical research design and uses secondary data collected from IKEA’s annual reports, government publications, research articles, industry reports, and other authentic sources. Financial performance is analyzed using profitability, liquidity, efficiency, and solvency ratios along with trend analysis, percentage analysis, and comparative analysis for the period FY2021 to FY2025. The findings reveal that IKEA maintained stable profitability, improved liquidity, enhanced inventory and asset utilization, and strengthened its financial position by reducing debt dependence. Trend and comparative analyses indicate growth in sales, assets, and shareholders’ equity, reflecting the positive contribution of FDI to IKEA’s expansion and operational efficiency in India. The study also highlights that FDI has facilitated retail modernization, supply chain development, employment generation, and improved consumer experience in the Indian retail sector. The study concludes that FDI has played a significant role in transforming the Indian retail industry and has positively influenced IKEA’s growth, financial stability, and long-term sustainability in the Indian market. Keywords; FDI, Indian retail sector, IKEA, Multinational retailers, Financial performance analysis, supply chain management