Dive Brief:

• In trying to meet India’s requirement to locally source a third of items sold in the country, furniture retailer Ikea has slowed its expansion plans, the Wall Street Journal reports.

• After lobbying the Indian government, the company got a reprieve and can continue its efforts to reach the mandated threshold by 2022. Its first store in India is planned for 2017.

• The Swedish company says that establishing factories in India could actually help lower its costs. But an unskilled labor force, poor infrastructure, outdated technology, and bureaucratic red tape are major obstacles, according to the report.

Dive Insight:

Ikea has good reason to expand into India: The country has an emerging middle class dominated by millennial-age, mobile-first consumers, among other perks. That has led many retailers to eye the country as an alternative to faltering China. 

English is an official language in the country, and serves as a common language for many of the sub-populations there. And while there’s a Chinese equivalent to Facebook, Twitter, and other social media platforms, the most widely used ones in India are those that are widely used in the U.S. India gives Facebook its second-largest membership base, after the U.S. That means brands have one less barrier to bust through when reaching Indian consumers.

Above all, though, experts have told Retail Dive that India’s demographics are almost ideal for retailers, with a population that includes a large young, mobile-first generation and a growing middle class. It’s now outpacing China as the world’s fastest-growing big economy.

But, it turns out, there's a catch, or several. The bureaucratic and economic realities in India also present significant obstacles, as this report on Ikea demonstrates.