FIPB to take up Ikea proposal next week

Written by fe Bureau | New Delhi | Updated: Jan 2 2013, 05:12am hrs
The Foreign Investment Promotion Board (FIPB) on Monday sought more information from Swedish furniture maker Ikea for its India investment plans and its proposal to open cafeterias in its retail stores. The FIPB will take up the matter for discussions next week.

"Ikea's proposal will be taken up next week. No decision was taken today. More information has been sought from Ikea, economic affairs secretary Arvind Mayaram said.

According to senior officials of the department of industrial policy and promotion (DIPP), Ikea had approached the government for a review.

Ikea wants a review of the decision that was taken by the FIPB last month as it wants to open cafes in its stores similar to the concept it says it has in other countries, said a DIPP official.

The FIPB on November 20 cleared the Swedish firm's proposal to invest R10,500 crore in single-brand retail in India through its wholly-owned subsidiary Ingka Holding Overseas BV. This is the largest foreign direct investment (FDI) in single-brand retail in the country ever since the government allowed FDI in the sector in January this year.

However, the board struck off 18 products from 30 proposed categories and refused to let the company run its signature cafe and restaurant in the stores it plans to open. The board did not allow the company to sell items such as home and office-use products, textiles, apparel and fabric, electronic items, leather products, toys, books, lifestyle and travel-related items.

The proposal has already been scrutinised by the DIPP and will now have to be cleared by the Cabinet Committee on Economic Affairs as the FIPB can clear investment applications worth up to R1,200 crore only.