Finance Ministry to reconsider IKEA's proposal
The company had envisaged an investment of Rs 10,500 crore in single-brand retail trading.
New Delhi: The Finance Ministry is likely to reconsider on January 18 the proposal of Swedish furniture major IKEA for opening cafeterias at its proposed mega retail outlets. "Meeting of Foreign Investment Promotion Board (FIPB) is scheduled on January 18 and the IKEA's case may be taken up," a Department of Industrial Policy and Promotion (DIPP) official said.
Earlier, FIPB, under the Finance Ministry, had taken up for reconsideration the IKEA's application. However, no decision was taken as the board headed by Economic Affairs Secretary Arvind Mayaram had sought more information from the Scandinavian country for its India investment plans.
"The DIPP would soon submit all the information which the FIPB has sought," the official said. The board on November 20 had given its recommendation to allow the Swedish furniture manufacture to invest Rs 4,200 crore in the country to for single-brand retailing of its products. The recommendation was forwarded to the Cabinet Committee on Economic Affairs (CCEA) for its nod.
However, following only part approval to its investment plans, the company had made a representation to the DIPP, which forwarded a request to FIPB for reviewing its November 20 decision.
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.
The company had envisaged an investment of Rs 10,500 crore in single-brand retail trading after India allowed 100 per cent FDI in the segment. IKEA, the world's largest furniture retailer, operates 336 stores in 44 countries. It 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.