Will Ikea be able to run its cafe in India FIPB to take call today

Written by Press Trust of India | New Delhi | Updated: Dec 31 2012, 06:54am hrs
The Centre is likely to clear Ikea's proposal to open cafeterias at its proposed mega retail outlets when the Foreign Investment Promotion Board (FIPB) reviews the Swedish furniture major's request on Monday.

The FIPB, headed by economic affairs secretary Arvind Mayaram, has already allowed Ikea to invest R4,200 crore to undertake single brand retailing of its products. Following a representation from the Swedish firm, the Department of Industrial Policy and Promotion (DIPP) had recently forwarded a request to FIPB for reviewing its November 20 decision giving only part approval to Ikea's plan.

"Review the request of DIPP" regarding Ikea is on the FIPB agenda, sources said. Batting for Ikea's proposal, commerce minister Anand Sharma had recently said that government has taken a favourable view on Ikea's request.

"All the stores globally whether Ikea or some other single-brand retailers, where people shop for longtime... There are cafeterias inside. The government has taken...note of the representation that Ikea has made in this regard and a favourable view has been taken so that we accept their global model and the process of FIPB's formal approval is currently underway," he said.

Sources said that besides furniture, the Scandinavian firm in its original application had sought government approval to sell items such as textile products, consumer electronics, leather products, lifestyle products, and food and beverages to be served at its restaurants and cafe.

The company had envisaged an investment of R10,500 crore in single brand retail trading after India allowed 100% FDI in the segment.

An IKEA spokeswoman said opening of the food joints inside its stores is a part of its global concept. We expect to have IKEA restaurant and cafe inside the IKEA stores in India as every other store worldwide. The IKEA cafe/restaurant is a mandatory and an integral part of the IKEA concept and offer to our customers,she said. The restaurants and cafes will only be located inside the stores and the company does not have any intention of setting up independent standalone restaurants.