The foreign investment promotion board (FIPB) has given its approval for IKEA's Rs 10,000 crore investment proposal. IKEA will be able to sell its entire product line up and set up cafes, but this is subject to approval from the cabinet committee of economic affairs (CCEA), reports CNBC-TV18’s Akansha Sethi quoting sources.
Last time, it was a proposal only for the first tranche, but now they have approved entire Rs 10,000 crore investment. This approval is not only for their furniture segment, but it is for all product lines including cafeteria. Earlier, FIPB had been waiting for information from Department of Industrial Policy and Promotion (DIPP) to grant approval.
The only condition that now remains is the sourcing norm, which will be at 30 percent. Sourcing will have to be done from an Indian company and not via a subsidiary that can source from other countries.
After long drawn bureaucratic procedural delays, IKEA can now breathe a sigh of relief. With one change in policy as well as retraction of the entire proposal, finally, there is a bureaucratic stamp of approval on the IKEA proposal, but it is yet to be vetted by the Cabinet Committee on Economic Affairs (CCEA).
Speaking to CNBC-TV18 IKEA's country retail manager said, "We consider this as a very positive development. We are now awaiting approval from the cabinet and subsequently a notification, so that we can initiate the process of establishing IKEA stores in the country."
IKEA bagged approval today because Anand Sharma, who steered this proposal from the government’s side is leaving for Davos tomorrow. This is one proposal which he can show international investors, saying how a big well known company’s proposal has been approved in India.
He will be meeting with about 20 chief executive officers (CEOs) in Davos. The commerce minister can showcase this approval to the world saying please come and invest in India.