Decision on IKEA’s India plans put off
31 Dec 2012
The finance ministry has sought more information from Swedish furniture maker IKEA on its India investment plans and will take its proposal to open cafeterias at its proposed mega retail outlets next week.
"IKEA's proposal will be taken up next week," economic affairs secretary Arvind Mayaram said today after the Foreign Investment Promotion Board (FIPB) reviewed its application.
The FIPB, headed by Mayaram, had, on 20 November, submitted its recommendation to the cabinet committee on economic affairs (CCEA) for permission for IKEA to invest Rs4,200 crore opening single-brand retail outlets for its products in India.
IKEA, which had planned to invest Rs10,500 crore in India, including in cafeterias inside its furniture stores, is not satisfied with the partial approval. It insists that cafeterias are an integral part of its business model, from which it will not deviate.
Following a representation from the Swedish firm, the Department of Industrial Policy and Promotion (DIPP) requested the FIPB to review its decision to give only part approval to IKEA's plan.
The FIPB met today to discuss the issue and was widely expected to reach a decision in favour of IKEA - particularly after commerce and industry minister Anand Sharma said last week that the government has taken a favourable view of IKEA's request.