No relaxing of norms for Ikea, says Centre
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 is a single-brand approval. So they can sell those items which they can brand,” Economic Affairs Secretary Arvind Mayaram told reporters on the sidelines of the Asia Securities Forum.
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.
It is not yet clear whether product restrictions will delay or alter IKEA’s investment plans in the country. The retailer has said it will review the details of the approval once they are made public.
The government has presented IKEA’s planned entry as a sign that foreign investors have kept faith with Asia’s third-largest economy, at a time when growth has declined and political protests have erupted over expansion by foreign firms.
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.