IKEA insists on approval for its entire range of products
New Delhi: Swedish furniture retailer IKEA on Thursday said it wants the government to allow it to "retail its entire range of products", including opening of cafes in its stores in India, in the wake of FIPB approving only Rs 4,200 crore investment out of a total of a proposed Rs 10,500 crore.
"The IKEA Group must have the ability to retail its entire range of products in India as is being done globally in every country, where IKEA stores are located. This is as per the IKEA concept," a company spokeswoman told PTI.
She said the IKEA Group has clarified to the Indian government on the categories of products that it can sell here based on its global concept and range.
"It is not the intention of IKEA Group to seek a general or broad approval for a wide variety of products. We are true to our application that we submitted in June 2012 and we have not submitted a fresh proposal," the spokeswoman added.
In that application the company had proposed to invest Rs 10,500 crore over a period of time by set up 10 furnishing and homeware stores as well as allied infrastructure over 10 years in India. Subsequently, it plans to open 15 more stores.
The FIPB had, however, in its November 20 meeting cleared investment of only Rs 4,200 crore by IKEA and forwarded the proposal to Cabinet Committee on Economic Affairs (CCEA) for consideration as proposals of FDI over Rs 1,200 crore requires CCEA nod.
"The IKEA Group is confident that the Indian government will support IKEA's application as per the IKEA concept and IKEA respects the Indian government's efforts in this process," she said, adding the group is now waiting for the approval from the CCEA.
Government sources had said 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.
"IKEA has again sent its application for review, seeking permission to let it open cafeteria at least," an official source has recently said.
The IKEA spokeswoman said opening of the food joints inside its stores is a part of its global concept.
"We expect to have IKEA restaurant and cafe inside the IKEA stores in India as every other store worldwide. The IKEA cafe/restaurant is a mandatory and an integral part of the IKEA concept and offer to our customers," she said.
The restaurants and cafes will only be located inside the stores and the company does not have any intention of setting up independent standalone restaurants.
"The approval for the restaurant and cafe should not be an obstacle in our application as it is part of the IKEA concept and not a separate proposal," the spokesperson said.
Yesterday, Commerce and Industry Minister Anand Sharma had said: "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."
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