Abu Dhabi-headquartered Lulu is looking to raise India’s share in its total imports to 35% over the next two years, from about 26-27% currently, a move aimed at improving supply chain certainty and managing price volatility, MA Yusuff Ali, chairman and managing director, told ET in an interview. The group imports about ₹11,000 crore worth of goods from India each year, led by food items.
“India is one of our most strategic sourcing destinations across food and non-food categories,” said Ali. “Going forward, we see India becoming even more central to our sourcing strategy, not only for the GCC but also for other markets.”
Lulu Group largely sources agricultural and food items from India, including fresh fruits and vegetables, spices, FMCG products, and textiles through its more than 30 own sourcing and food processing centres across the country.
“The scale is significant and has grown steadily year-on-year,” said Ali. “India has a strong manufacturing capacity, competitive costs, and increasing quality standards. We look forward to further enhancing that, which will take it up to the 35% mark over the next two years.”
Lulu Group operates more than 260 retail stores across the Gulf Cooperation Council (GCC) market, India, Malaysia, Egypt, and Indonesia, among others.
Against a backdrop of rising geopolitical risks, including new US tariffs, and commodity inflation, Ali said he remains cautious but optimistic.
“I am optimistic as consumers remain resilient and markets adapt quickly” he said. “Our strategy is diversification and preparedness through multiple sourcing origins, strong documentation, and audit mechanisms, and close alignment with government guidelines.”
Ali highlighted that over the last year, the group has accelerated supplier diversification and strengthened sourcing from multiple origins for key commodities, besides working with shipping companies to ensure container availability on priority.
“We are also working very closely with producers to secure better visibility on volumes and pricing,” he said. “Going forward, we will continue to strengthen direct sourcing, expand private label, and contract farming models, and invest further in cold chain and distribution. The objective is to improve supply certainty and manage price volatility better.”
Lulu Group has set up sourcing offices in the UK’s Birmingham, New Jersey in the US, Canada, Turkey, Italy, and Spain, among other locations, to ensure sustained supply and maintain affordability.
Ecommerce
ADX-listed Lulu Group, which has retail and sourcing operations in 26 countries, is also exploring partnerships with ecommerce firms in India in line with its omni-channel strategy, said Ali.
In the Middle East, the retail giant has tieups with Amazon and Talabat in the UAE, HungerStation in Saudi Arabia, and Snoonu in Qatar.
“We are looking at similar tie-ups in India with leading online aggregators,” he said. Initial talks are already on, and we expect to roll out our hypermarket offerings through their platform within the first quarter of 2026.”
The group had listed on the Abu Dhabi Securities Exchange (ADX) in late 2024, raising $1.72 billion.
Union budget
Ali said he is expecting consumption and export-boosting measures, including further rationalisation in taxes and targeted incentives for exports in the Union budget, which will be announced on February 1.
“Further rationalisation of taxes could put more disposable income in the hands of consumers and support spending,” he said. “We are also hopeful of targeted incentives to strengthen exports, especially at a time when global demand remains uneven.”
Besides, sustaining investments in infrastructure and enhancing connectivity in Tier 2 and Tier 3 cities will be particularly important for retail, as it will expand organised retail penetration, improve supply chains, and unlock new consumption centres across the country, he added. Lulu Group had announced a `10,000 crore investment in India over a three-year period in India in 2023, which, according to Ali, is “progressing well.”
“The investment plan remains on course,” he said. “Investments are progressing across retail expansion, backend logistics, warehousing, and food processing. We are also investing in employment, supplier partnerships, and technology integration.” Lulu Group runs malls and hypermarkets in 10 Indian cities. The group’s upcoming projects in India include shopping mall and hypermarket projects in Ahmedabad and Visakhapatnam, hypermarkets and express market projects in Chennai, Hyderabad, Bengaluru, Greater Noida, Lucknow, Gurgaon, and several towns in Kerala, besides food processing and logistics centres in Greater Noida, Srinagar, and Kalamassery (Kerala).
