Cafes to cosmetics, Ikea to offer the whole basket
Ikea had sought a review of the decision taken by the FIPB in November while approving its first tranche of investment worth R4,200 crore, wherein the board had struck off 18 product categories of the proposed 30 and refused permission to the company for opening signature cafes and restaurants in its stores. The board said Ikea could not sell items such as home and office-use products, textiles, apparel and fabric, electronic items, leather products, toys, books and lifestyle and travel-related items.
Ikea then approached the industry department, which forwarded the request to the FIPB seeking a review of its November 20, 2012, decision. Subsequently, the FIPB deliberated on the representation at its meeting on December 31, 2012, and sought clarifications from the company. Once the FIPB clears the company’s proposal, it will go to the cabinet committee on economic affairs (CCEA) as is the norm for all foreign investment proposals exceeding R1,200 crore.
The government in September 2012 relaxed a provision requiring single-brand retailers to source at least 30% of their requirements from SMEs, modifying rules to say it was “preferable” rather than ‘mandatory. Ikea will operate here through its wholly-owned subsidiary Ingka Holding Overseas BV and the investment of R10,500 crore will be the largest by a single-brand retailer. The FIPB has also okayed two single-brand FDI proposals of British footwear retailer Pavers England and a 51% JV of US luxury clothing retailer Brooks Brothers.
Be the first to comment.
