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:

Politics

REUTERS SHOWCASE

Fund Raising

Fund Raising

Flipkart raises $700 million in fresh funding.   Full Article 

Reforms Push

Reforms Push

Modi may order insurance, coal reforms if vote delayed - officials.  Full Article 

Reuters Exclusive

Reuters Exclusive

India looks to sway Americans with nuclear power insurance plan  Full Article 

To Boost Growth

To Boost Growth

Crank up public spending to revive growth - chief economic adviser.   Full Article 

Bold Steps

Bold Steps

SpiceJet rescue plan marks bold bet on Indian aviation recovery.   Full Article 

New Airline

New Airline

Tata, Singapore Air venture Vistara to take off on Jan 9.  Full Article 

Online Sales

Online Sales

Knock knock. Who's there? Amazon's best-selling holiday author.  Full Article 

Hacking Attack

Hacking Attack

N.Korea says did not hack Sony, wants joint probe with U.S.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

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