IKEA's 1.5-billion euro investment proposal was withdrawn from the FIPB's agenda on December 31, 2012 and a formal announcement in this regard was made on Tuesday through an official statement by the finance ministry, explains CNBC-TV18's economy editor Siddharth Zarabi, quoting sources. This comes in the wake of the FIPB disallowing IKEA to set up cafes within its stores proposed to be set up across the country.
According to the finance ministry statement, the FIPB meeting on December 31 had on its agenda four FDI proposals worth almost Rs 1,287 crore for approval. The statement adds that INGKA Holding Overseas BV's FDI proposal had been withdrawn from the agenda.
INGKA was the investment vehicle via which the Netherlands-based IKEA was supposed to invest in two tranches a total of 1.5 billion euro in the proposed Indian operation. Sources indicate that the lack of agreement on some of the key issues this proposal was the cause for the proposal to be withdrawn.
The withdrawal was despite the commerce and industry ministry having cleared this proposal and being almost received the FIPB’s approval when the Prime Minster was traveling overseas. Sources explain that the FIPB’s withdrawal of the proposal could be due to some sort of misunderstanding.