'IKEA will not be allowed to sell food items in India'

Global furniture major IKEA will be allowed to run cafes and restaurant within its single brand stores in India but not sell food items, Parliament was informed today.

The company had sought permission for single brand retail trading of 'IKEA' products including setting up of IKEA restaurants and cafe and IKEA Swedish food market (to sell only single brand IKEA products), Commerce and Industry Minister Anand Sharma said in a written reply to the Lok Sabha.

"The proposal has been recommended by FIPB to the extent that IKEA can have a restaurant/cafe in accordance with their global model but cannot engage in retailing of food items.

"Accordingly, the following condition has been proposed: Food and beverages to be sold within IKEA restaurant/café located in the IKEA retail store. No food items shall be retailed off the shelf in any other part of the retail store," he said.

Though the world's largest furniture maker had received the approval of Foreign Investment Promotion Board (FIPB) for its Rs 10,500 crore proposal, Cabinet Committee on Economic Affairs has yet to approve it.

FIPB can clear investment proposals worth up to Rs 1,200 crore.

Sharma also said that some foreign companies had requested for permission to sell food items as part of their proposal on FDI in single brand retail trading.

"Marks & Spencer sought approval to sell Marks & Spencer branded long life processed foods such as chocolates, confectionery etc. The proposal was rejected on 9th January 2009 as retailing of food items is not permitted in the policy on FDI in single brand retail," he added.