IKEA approaches FIPB again; seeks review of its application
New Delhi: Swedish furniture retailer IKEA has approached FIPB again seeking a review of its earlier application so that it is allowed to open cafeteria at its proposed single brand retail stores in the country.
On November 20, the Foreign Investment Promotion Board (FIPB) approved the IKEAs proposal to invest Rs 10,500 crore to open single brand retail stores in India, but pruned the list of items which it wants to sell.
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 cafe.
"IKEA has again sent its application for review, seeking permission to let it open cafeteria at least," an official source said.
The Department of Industrial Policy and Promotion has forwarded the review application along with its comments in support of IKEA. The FIPB is expected to take up the proposal in the next meeting, the source added.
"So many other foreign companies, which want to open stores in India, are keenly watching the developments in IKEA proposal. The government needs to send a healthy signal on the issue," another source said.
IKEA, the world's largest furniture retailer, operates 336 stores in 44 countries. It plans to invest USD 778 million to set up 10 furnishing and homeware stores as well as allied infrastructure over 10 years.
Subsequently, it plans to invest $1.7 billion to open 15 more stores. The company has said it will take three years to build a supply chain to roll out its first outlet in the country.
It was the third foreign company after apparel maker Brooks Brothers and Pavers England, the UK-based shoemaker, to obtain FIPB approval under the foreign investment policy for single-brand retail.
Key Cabinet ministers have touted IKEA's proposal as evidence that foreign investors are still bullish on India, and the government diluted some contentious provisions of its single-brand retail policy.
The FIPB has approved a total of 66 proposals pertaining to single-brand retailing since 2006.