No dilution of permission granted to Ikea: Mayaram
The Finance Ministry today said there is no dilution of the permission granted to the Swedish furniture major Ikea to set up its business here, as the Rs. 10,500 crore investment proposal is limited to only single brand retailing.business Updated: Nov 24, 2012 17:53 IST
The Finance Ministry on Saturday said there is no dilution of the permission granted to the Swedish furniture major Ikea to set up its business here, as the Rs. 10,500 crore investment proposal is limited to only single brand retailing.
"It is an incorrect understanding of the approval which has been given to Ikea. It's a single brand approval. So they can sell those items which they can brand," Economic Affairs secretary Arvind Mayaram told reporters in Mumbai on the sidelines of the Asia Securities Forum meet that concluded on Saturday.
Earlier this week, the Foreign Investment Promotion Board (FIPB) had reportedly halved the product range that Ikea listed out at 30 items. This reportedly excluded items including textiles, office supplies and food, among others.
Swedish furniture major Ikea, which plans to invest Rs 10,500 crore to set up stores in the country, has already received the approval from the Department of Industrial Policy and Promotion (DIPP).
"Whatever they can brand, they have been permitted to," Mayaram said, adding "I think, their core activities have all been permitted."
Meanwhile, Mayaram sought to underplay the bribery allegations against the US retail giant Wal-Mart's domestic joint venture, saying the issue has been blown out of proportion and that the law will take its own course.
"The law takes its own course, and if someone violates the law, a suitable action will accordingly be taken," he said, when asked whether there is a need to take some precautionary steps in the aftermath of the allegations against the world's largest retailer.
Stating that it was not such a big issue, he further said, "the law is in place to deal with such issues."
Wal-Mart Stores Inc has a 50:50 joint venture with the Bharti Group for wholesale business, and runs the operatons under the label of Best Price Modern Wholesale.
Last week Wal-Mart had said it was investigating allegations of violation of Foreign Corrupt Practices Act (FCPA) of the US, that bars bribing officials of foreign governments, in India and other countries including China and Brazil.
The JV company is understood to have suspended five of its officials including company CFO Pankaj Madan, as part of an ongoing global investigation.