Govt restricts what IKEA can sell in India - reports

MUMBAI Fri Nov 23, 2012 5:44pm IST

The sign of an IKEA furniture store is seen in Berlin, November 16, 2012. REUTERS/Thomas Peter/Files

The sign of an IKEA furniture store is seen in Berlin, November 16, 2012.

Credit: Reuters/Thomas Peter/Files

Related Topics

MUMBAI (Reuters) - The government has placed tight restrictions on what IKEA can sell in the country, in what would be the latest hitch for the furniture seller as it plots 1.5 billion euros expansion there, newspapers reported.

The finance ministry has forbidden IKEA from selling items including textile products and office supplies, cutting the number of product categories the company can sell to 15 from 29, the Economic Times reported.

The Sweden-based retailer was initially wary of entering India as it faced stiff local sourcing rules, which India later relaxed.

It was not immediately clear whether any further product restrictions would delay or alter IKEA's investment plans.

"IKEA is waiting for the formal notification of the details regarding the content of the latest approval from FIPB," an IKEA spokeswoman in India said on Friday, referring to the Foreign Investment Promotion Board, part of the finance ministry which clears investment proposals from international companies.

"We will have to look into the details and review what it means for us. We will be able to comment after that," she added.

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.

India has thrown open its doors to foreign retailers this year, liberalising its investment rules to allow in global supermarket chains and as well as lifting an investment cap on single-brand retailers such as IKEA.

But the rule changes have provoked a furious backlash from some political parties and domestic retailers, a reaction which threatens to derail a package of pro-market reforms aimed at reviving growth.

(Reporting by Nandita Bose; Editing by David Holmes)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Canada Shooting

Canada Shooting

Attack on parliament, killing of soldier stun Canada's capital.  Full Article 

Earnings Season

Earnings Season

Wipro sees rosier end to year as U.S. clients spend.  Full Article 

Business Climate

Business Climate

Fears for tough penalties grow as India cleans up business  Full Article 

New Email Service

New Email Service

Google launches new email service dubbed "Inbox".  Full Article 

DLF Appeals

DLF Appeals

DLF seeks interim relief from capital market ban  Full Article 

Falling Oil Prices

Falling Oil Prices

Indian consumers respond to softer oil, food prices  Full Article 

Book Keeping

Book Keeping

RBI fires warning shots on companies' lack of FX hedging.  Full Article 

Policy Repo Rate

Policy Repo Rate

Most external members suggested rate cut in RBI's Sept review.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage