With Swedish furniture retailer IKEA refusing to tweak its global model, which includes an in-store café, the Government seems to have blinked in approval.
Commerce and Industry Minister Anand Sharma on Wednesday said that the Government had taken “sensitive note” of the issue of allowing the company to replicate its model in India.
The dispute arose after the Government had indicated that IKEA may not be allowed to set up cafés in its stores as it violated the norms of single-brand retailing.
IKEA does not operate outlets without the cafes and restaurants in any market across the world.
The furniture retailer plans to invest Rs 10,500 crore in India over the next 10 years, one of the largest FDI infusions in single-brand retail. Recently, it got FIPB approval to bring in only Rs 4,200 crore.
“IKEA has a global model and it is what they want in India as well. We see no reason why it should not be allowed when we have allowed 100 per cent FDI in single-brand retail. The Government has taken IKEA’s representation and a favourable view will be taken on it,” the Minister said.
The Department of Industrial Policy and Promotion, under Sharma, has already forwarded a request to Foreign Investment Promotion Board (FIPB) in the Finance Ministry for reviewing its November 20 decision giving part approval to IKEA.
The proposal will come up before FIPB on December 31.
He said IKEA had a global model as a single-brand retailer and India had a clear definition in this regard.
The 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.