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Last updateTue, 17 Mar 2015 2pm

IKEA sends out "injunctions" to small businesses ahead of India roll-out

Swedish budget furniture giant IKEA has embarked on a campaign to slay its smaller Indian competitors, after winning approval to set up 25 megastores in the country. 

The Economic Times (ET) reports that lawyers for the company have sent injunctions to a dozen SME's (Small and Medium-scale Enterprises) across India that ply everything from modular furniture to event planning under names similar to the hundreds of brand names used by IKEA.

One such company is "Aikya Global", an event planning and communications company with operations around the sub-continent. 

In a 1000-page legal notice IKEA lawyers have requested the founders of Aikya Global to remove the company's website as it is "phonetically similar to IKEA", according to the ET report.

s9kna B Mariyanka, co-founder of Aikya Global, told the ET that IKEA's move is a clear sign that allowing big foreign retailers into India will wipe out small businesses.

"If international companies coming to India means that small companies will start losing their business for unjustified reasons, it is unfortunate," said Mr Mariyanka.

"We are totally surprised and zapped with this legal notice and feel that we have been bullied as there is no similarity between what IKEA does and what we do," Mr Mariyanka adds.

IKYA Human Capital Solutions, a Bangalore-based, £150 million HR solutions provider, is another firm to receive the IKEA notice. 

"This is harassment and we will counter this legally," said Ajit Issac, founder of the company.

Mr Issac added: "We are not into retail. Where is the question of misusing their brand name."

"In the past 3-4 months, we have become very aggressive in trying to protect IKEA's trademark, a popular brand name globally, in India," said SK Bansal, co-owner of KG Bansal & Company Associates, the law firm representing IKEA, told the ET.

IKEA has pledged to invest more than $1 billion in India, creating thousands of jobs and bringing in much-needed foreign investment to the country.

The company has committed to source 30% of its raw materials and products from local small businesses in line with conditions laid down by the government.

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