In India, it’s illegal for IKEA to sell the following products

wordpress ^ | January 22, 2013 | Dan from Squirrel Hill

[grundle]

Dan from Squirrel Hill's Blog

In India, it’s illegal for IKEA to sell the following products

In India, it’s illegal for IKEA to sell the following products:

• Home and office use products, solutions, fittings, furnishings and accessories including stationery
• Textile products including apparels and fabrics
• Consumer electronics and accessories
• Cleaning products and accessories
• Leather products
• Storage and sorting products and accessories
• Children’s products and accessories
• Safety-related products
• Travel-related products
• Cosmetics and accessories
• Recycling solutions and products
• Lifestyle products and accessories
• Decorative products
• Gift articles and accessories
• Food and beverages to be served at the IKEA restaurants and café to customers in the IKEA retail stores
• Beach products and accessories

Apparently, the Indian government would prefer to keep the country in the 19th century instead of the 21st.

[MasterGunner01]

OK, I’ll bite, what’s legal for IKEA to sell?

[MasterGunner01]

OK, I’ll bite, what’s legal for IKEA to sell?

[unixfox]

Popcorn. Lots of popcorn.

[Jyotishi]

A more detailed news story:

FIPB roadblock for IKEA products

Eighteen of 30 product categories proposed by Swedish furniture major struck off

Nivedita Mookerji / New Delhi Nov 23, 2012, 00:34 IST

In what could spoil the single-brand retail party, the Foreign Investment Promotion Board ( FIPB) is learnt to have struck off as many as 18 product categories out of the 30 proposed by Euro 25-billion Swedish furniture major IKEA.

Coinciding with the din in Parliament over the government permitting 51 per cent foreign direct investment in multi-brand retail, single-brand retail would run into a rough patch too, if IKEA reviews its India entry plans over the fresh barriers thrown up by the FIPB.
 
It is believed many single-brand retail chains, including some from Europe, have been waiting for the green signal to the big-ticket IKEA proposal as a test case, before they send in their applications. 

WHAT’S OUT

Some of the products rejected by FIPB
Home and office use products, solutions, fittings, furnishings and accessories including stationery
Textile products including apparels and fabrics
Consumer electronics and accessories
Cleaning products and accessories
Leather products
Storage and sorting products and accessories
Children’s products and accessories
Safety-related products
Travel-related products
Cosmetics and accessories
Recycling solutions and products
Lifestyle products and accessories
Decorative products
Gift articles and accessories
Food and beverages to be served at the IKEA restaurants and café to customers in the IKEA retail stores
Beach products and accessories

Industry sources pointed out that IKEA, which operates over 300 stores across around 40 countries, typically goes out to foreign markets with its full range of products and categories, and with so many categories deleted from its list, the chain might rethink on whether to enter the India market or not.

But replying to Business Standard, IKEA said, “We are now internally reviewing the details of the latest decision from FIPB.” The company said it would be in a position to comment on its India stand “when we are more clear about what it means for us in the coming days”.

The IKEA proposal was taken up by FIPB, a key wing in the finance ministry, for vetting foreign investment proposals, on Thursday.

Officials said the IKEA intent to invest Euro 1.5 billion in India to set up stores across the country was recommended for clearance by the FIPB, but with conditions attached.

Even as the earlier condition of 30 per cent sourcing from small and medium enterprises was removed from the single brand retail FDI policy following IKEA’s stand that it was not feasible to follow, the new set of conditions recommended by FIPB may upset its plans.          

The category of items that FIPB has taken out of the list of what all IKEA can do in India include home and office use products, solutions, fittings, furnishings and accessories including stationery; textile products including apparels and fabrics; toys, books and gadgets; consumer electronics and accessories; decorative products; leather products; storage and sorting products and accessories; cleaning products and accessories; children products and accessories; safety-related products; travel-related products; cosmetics and accessories; gift articles and accessories; lifestyle products and accessories; beach products and accessories; recycling solutions and products; food and beverages to be served at the IKEA restaurants and café to customers in the IKEA retail stores; products under development by IKEA internationally as well as those developed especially for the Indian market.

IKEA has been permitted to sell furniture products, which is the chain’s core business, in India. Also, knocked-down furniture and accessories related to furniture would be allowed for sale. Other things that it can showcase and sell in India include cushions, pillows, rugs, mattresses, quilts, curtains, window shades, blinds, electrical and kitchen utensils, cooking range equipment, bathroom fixtures,  tableware,  mirror, frames, pictures, candles, and glassware products.      

Besides the other restrictions, FIPB has also recommended that no activities falling within the purview of NBFC (non-banking financial companies) activities will be conducted by the applicant. That would imply that IKEA cannot offer any finance scheme to its customers.      

A government official argued that “concessions and adjustments are bound to be made on both sides.” IKEA may decide to tailor its outlets accordingly, he added. Restriction on a few non-core products that may not contribute much to its bottom line may not pose a hurdle, he added.

IKEA, in its second coming, had made its application to the DIPP on June 22. It had earlier decided to drop the plan due to the FDI restriction in the country as the chain wanted to be on its own with 100 per cent ownership, rather than diluting its brand with a partner. The IKEA stores are expected to occupy as much as 100,000 sq ft of space each.

Also Read

- An IKEA without cafes would be a first
- IKEA without signature cafes would be a first in India
- Govt restricts what IKEA can sell in India
- Ajit Singh directs DGCA to propose institutional mechanism
- FIPB approves IKEA’s single-brand entry
- Ikea application for single brand retail cleared by FIPB

http://www.business-standard.com/india/news/fipb-roadblock-for-ikea-products/493399/

[Mamzelle]

They haven’t found the right fixer to bribe the right bureaucrats.. India is hugely corrupt.

[jennychase]

>>>Ajit Singh directs DGCA to propose institutional mechanism

Very corrupt guy. Election is coming, current ruling Congress Party is looking for bribe for election.

[jennychase]

>>>Apparently, the Indian government would prefer to keep the country in the 19th century instead of the 21st.

Protecting small mom and pop shops.

[LifeComesFirst]

India has a really bad protectionist problem. Has had for years. After fifty years of crushing poverty they actually started growing economically when they jettisoned a lot of their socialist/protectionist nonsense, but they are far from where they need to be, policy-wise.

[Cronos]

the Indian government would prefer to keep the country in the 19th century instead of the 21st.

Why? india already has stores that sell similar products to Ikea and it has cheap labor, so getting someone to make you a customised product isn't that difficult

IKEA's cheap products may not easily sell in India because you can already get similar products from the gray market

[Cronos]

I also thought India's way of cutting foreign investment at the knees and letting it in only gingerly (first 26%, then 49%, then 51%, finally full ownership) was stupid

But then I moved to Poland and found out what the post-communist government did here

Essentially they opened up immediately and either the local companies folded as they couldn't compete, or famous brand-names like Wedel etc. were sold to foreign companies -- in some cases this was a tragedy as Wedel for instance (a very good chocolate company with quality as good as Cadburys or better) was grabbed by the communists and the family escaped to the West. But when the time came to open up, the family couldn't afford to pay back for this, so it was sold first to Cadburys and last year to Lotte

Net-net, famous Polish brands are owned by foreigners

Of course, India, as a continent, not a country could afford to keep the pace slow and avoid discontent

[Cronos]

Protecting small mom and pop shops.

Well, they didn't allow retail chains for 20 years, but are slowly opening them up. I visited Bombay as a child in the 90s, then as an adult in the 2000s and then in 2011 and each time I saw a change in the mom and pop stores. By 2011, most of these had gone and the kids of the owners had moved into other businesses or worked in companies

By giving the population time to adapt, india probably prevented social discontent

Opening up in a shock attempt like the Russians did in the 90s could have led to Balkanisation

[SeminoleCounty]

I guess this kinda blows away the Free Trader Communist Globalist myth that “Free Trade will open up markets”...

Seems like IKEA can only sell a limited number of items in India

Of course, this compounds the fact that India is already a massive Third World Craphole that has a per capita income that is 1/6th of what Mexico’s is....and yet you still have the liberal Free Traders praising how good India is

Wonder if they will allow Indian males to gang rape innocent females while inside an Indian IKEA?

[Reeses]

Indians do not like the Chinese, and most of IKEA’s products are made in China.

[Cronos]

I don’t think most of it. Here in Poland I’ve seen stuff made all over the world — from Sweden to Poland to Indonesia to China to India etc.

[MimirsWell]

If you have bought anything in IKEA you will know that a very large % of all their products are made in China. So its not really the Swedes we are keeping out from competing with Indian companies but the Chinese.

The same lot out here who are shamelessly calling India names are also the people who cry about Chinese-made goods flooding their country and killing local enterprise. Talk of double standards!!!

If you weren’t as dumb in posting your uncouth comments linking completely unrelated things, and actually followed the discussions that took place between the Indian government and IKEA, you would have known that the most sticking of issues was about % of locally sourced goods that will be sold in the stores.

[Jyotishi]

> Wonder if they will allow Indian males to gang rape
> innocent females while inside an Indian IKEA?

Please be patient; perhaps there are innocent females available where you live?

[ravager]

Ah of course, you again.

So no Steubenville in here US correct?

[ravager]

It got nothing to do with corruption. Highly doubt anything is in the hands of this one guy Ajit Singh. The cap on foreign direct investment for single brand retail is a government ruling. Read the article. And this issue is all too much in the media focus for him to risk taking a bribe. And even bribing will not do any good unless the government actually changes the ruling.

I know just because its India everything has gotta be about corruption however that is definitely not the case here.

[ravager]

China produces about 20% of all Ikea good followed by Poland at 18%, Italy at 8%, Germany at 6%........ Sweden only produces 5% of all Ikea goods.

And their largest sales happen in Europe and US. For all the goods China sells they don’t even figure among the worlds top ten buyers. Talk about China getting the best deal.

India and Indonesia hardly figure anywhere as either supplier or manufacturer of Ikea good. There isn’t really a whole lot here for India to lose.