FIPB seeks more info from IKEA, to take up proposal next week
Finance ministry on Monday sought more information from IKEA for its India investment plans and will take up the Swedish furniture major's proposal to open cafeterias at its proposed mega retail outlets next week.business Updated: Dec 31, 2012 14:52 IST
Finance ministry on Monday sought more information from IKEA for its India investment plans and will take up the Swedish furniture major's proposal to open cafeterias at its proposed mega retail outlets next week.
"IKEA's proposal will be taken up next week," economic affairs secretary Arvind Mayaram said after the Foreign Investment Promotion Board (FIPB) reviewed the application.
The FIPB, headed by Mayaram, has already recommended permission to IKEA to invest Rs 4,200 crore for undertaking single-brand retailing of its products. The recommendation has been forwarded to Cabinet Committee on Economic Affairs (CCEA) for final approval.
An official in the Department of Industrial Policy and Promotion (DIPP) said that FIPB has asked IKEA to provide more information regarding its investment plans in India.
"No decision was taken today. More information has been sought from IKEA," Mayaram said.
Following a representation from the Swedish firm, DIPP had recently forwarded a request to FIPB for reviewing its November 20 decision giving only part approval to IKEA's plan.
Batting for IKEA's proposal, commerce and industry minister Anand Sharma last week had 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 long time... 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 had 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 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.