FIPB drops IKEA proposal from next meet agenda, seeks more info
The matter has not been listed for the next meeting of the Foreign Investment Promotion Board (FIPB), sources said. The next meeting of the Board in the Finance Ministry is scheduled for January 18.
The Finance Ministry today said that proposal of Ingka Holding Overseas BV was "withdrawn" from the Board's meeting that took place on December 31. Ingka Holding Overseas plans to set up wholly-owned subsidiary to undertake single brand retailing of IKEA products.
While no official reason was given why the matter was "withdrawn", sources said the Finance Ministry has sought more information from IKEA for its India investment plans.
The Board has already given approval to IKEA to invest Rs 4,200 crore for opening single-brand retail stores.
Sources said IKEA has originally sought approval for investing up to Rs 10,500 crore in the country.
Following the part approval, the company made a representation to the industry department, which forwarded the request to FIPB seeking review of its November 20 decision.
The issue was listed on the agenda of the last meeting of FIPB held on December 31.
After that meeting, Economic Affairs Secretary Arvind Mayaram had said that IKEA's proposal would be taken up in the following week.
Commerce and Industry Minister Anand Sharma is in favour of allowing IKEA to open cafeterias at retail outlets.
Besides furniture, IKEA 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 cafes.
IKEA, the world's largest furniture retailer, plans to set up 10 furnishing and homeware stores as well as allied infrastructure in over 10 years in India. Subsequently, it plans to open 15 more stores.
While India allows FDI in most of the sectors through automatic route, foreign investments in certain sectors require FIPB approval. Also, investment plans of over Rs 1,200 crore require CCEA clearance.
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