Even as the 25-billion euro Swedish furniture maker IKEA has struck out a number of product categories for the India market, prompted by the conditional nod from the Foreign Investment Promotion Board (FIPB) in November, the finance ministry wants to know the reasons for IKEA's revision of proposal.
A senior official of the Department of Economic Affairs (DEA) in the finance ministry wrote to his counterpart in the Department of Industrial Policy and Promotion ( DIPP) ahead of the December 31 FIPB meeting, saying: "It needs to be understood what has been left out, and why, in the revised application of Ingka Holdings (applicant company for IKEA)."
The DEA official sought "reasons for these changes at various stages" so that the matter could be put "in the right perspective in FIPB deliberations."
Responding to the letter, a DIPP official clarified the revised proposal had the "approval of the commerce minister, as is the practice in cases of single-brand retail." The official added "clarification, if any, can be provided at FIPB deliberations."
Typically, FDI proposals in single-brand retail are examined in the administrative department (DIPP), and these are forwarded/recommended to FIPB after the minister's nod.
At the December 31 meeting of FIPB, the IKEA proposal was deferred till the next meeting, now scheduled for January 18.
IKEA's original application had listed 31
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