In a dialog with The Indian Specific, Swapneel Nagarkar, enterprise head and govt vp at Godrej Interio, mentioned international commerce dynamics, India’s high quality management order (QCO) on furnishings merchandise, and tendencies in home demand. Nagarkar, who additionally chairs the Confederation of Indian Business (CII) Activity Pressure on Furnishings, mentioned India’s furnishings requirements have been framed conserving shopper curiosity in thoughts. Edited excerpts:
The US is India’s largest furnishings export market. Given latest tariff-related developments, the place do you see issues headed within the close to future?
We’re assured the Indian authorities will resolve tariff points with the US amicably, so enterprise continuity shouldn’t be affected. The truth is, with stiffer tariffs on a neighbouring nation and a few others, India is now extra aggressive — creating a possibility to extend exports. Most Indian exports are picket furnishings, particularly carved items from Rajasthan, which see robust demand overseas. In the meantime, India’s home furnishings market is huge — estimated at round Rs 2 lakh crore, together with each organised and unorganised gamers. It’s additionally extremely fragmented, in order an business, our present focus is on streamlining and higher addressing home demand alongside rising exports.
As India negotiates commerce agreements with Europe and the US, there was some pushback on sure high quality management orders (QCOs), together with the one on furnishings merchandise. How ought to we navigate this?
When FTAs are mentioned, it’s essential that each international locations uphold high quality requirements. India hadn’t successfully modernised furniture-related requirements. However, in the previous couple of years, the federal government has taken a constructive step — this course of has both been accomplished or is nearing completion in a number of classes. As soon as the QCO is in impact, BIS requirements will develop into relevant. Then, furnishings exported to India in addition to domestically manufactured furnishings might want to adjust to these requirements.
Exporters from different international locations can get BIS certification to make sure compliance. As per our info, inspecting authorities have been visiting main overseas suppliers to evaluate and certify them underneath BIS norms. When Indian suppliers are exporting to different international locations, they’ve to stick to overseas requirements, as a result of requirements are ruled by the way in which furnishings is utilized in these international locations. Equally, right now, India has created requirements primarily based on our nation’s necessities and it’s for everyone to adjust to them.
Issues have been raised in international boards that India’s furnishings requirements might pose limitations on design…
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Godrej has performed an energetic function in formulating these requirements, together with 6-7 different home furnishings gamers, together with some MSMEs, and worldwide gamers. I can say with confidence that the requirements are usually not limiting in any method, besides one — they require furnishings to final a minimum of 4-5 years — a good and cheap expectation for shielding the curiosity of shoppers. Based mostly on that, assessments for sturdiness, load-bearing, and utilization cycles have been outlined, however there are not any constraints on design or different artistic points for any nation.
Do you suppose India’s largely casual furnishings sector, particularly MSMEs, will wrestle to develop into QCO-compliant? What sort of assist can business our bodies or the federal government present to assist them comply?
MSMEs shouldn’t face main challenges in assembly the brand new requirements. A key focus of the federal government and CII is making certain straightforward, inexpensive entry to testing amenities for all gamers. The business, together with MSMEs, is working collaboratively with authorities to handle points like lab availability and logistics. Recognising their scale and publicity, MSMEs have additionally been given a compliance timeline of extra six months. These steps goal to handle their considerations in order that they correctly come onboard.
Did the furnishings business witness a consumption slowdown final 12 months?
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Let me break this into B2B (business-to-business) and B2C (business-to-consumer), as they behaved fairly in another way. Final 12 months, B2B furnishings noticed robust tailwinds, pushed by wholesome area absorption — 7-8 million sq ft greater than the earlier 12 months. In distinction, B2C confronted a slowdown, notably within the second half, which is the extra essential half for enterprise for everyone. This was largely as a result of challenges with disposable incomes among the many center class. In consequence, the general business didn’t expertise a lot development within the second half. That mentioned, the shift towards organised gamers continued, and Godrej managed to develop 12-14 per cent final 12 months. Trying forward, there’s constructive anticipation. With inflation underneath management, a secure macro atmosphere, and an excellent monsoon forecast, demand within the B2C section is predicted to enhance. The business might see 4-5 per cent development on a big base.
What sort of furnishings are Indians shopping for furnishings lately? How are they doing it?
The Indian furnishings market is split into premium and non-premium segments. The premium section is pretty insulated from the variability of the economic system. Premium consumers are more and more searching for tech-integrated, lifestyle-supporting furnishings — like beds with remote-controlled storage or sofas with charging ports. Additionally they worth personalisation, typically working with professionals for house interiors. Godrej addresses this by way of component-based, modular options that may be reconfigured later, like its Upmods vary. Within the economic system section, prospects sometimes purchase single useful items. To serve them higher, particularly youthful internet buyers, Godrej has strengthened its digital presence. From a traditionally offline mannequin, it now delivers to 18,000 pin codes by way of on-line channels, making certain wider entry throughout India.
On-line now accounts for 10 per cent of our B2C gross sales — it’s rising, however 90 per cent stays offline. Given India’s variety, offline will proceed to matter, and the trail forward is clearly omnichannel. As a division, we’re round Rs 3,800 crore in income. Of this, B2B merchandise contribute roughly Rs 1,400 crore, B2C merchandise about Rs 1,200 crore, and the stability comes from B2B tasks, together with interiors and audiovisual options.
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How are furnishings producers responding to rising requires sustainability, particularly round timber sourcing?
Sustainability is just going to develop in significance, and we’re seeing robust national-level efforts, with energetic assist from CII. Godrej has lengthy championed this trigger — 60-65 per cent of our product portfolio is now inexperienced licensed, and 45 per cent of our division’s income final 12 months got here from such merchandise.
That mentioned, consciousness is stronger within the B2B section, the place consumers demand sustainability certifications for furnishings and interiors. In B2C, consciousness continues to be evolving. Whereas some advanced shoppers do search for inexperienced credentials, it’s not but widespread. We imagine it’s our duty to boost consciousness and be sure that sustainability turns into central to the shopping for determination, particularly as we stay accountable to future generations.