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Ikea Can't Get the Meatball Rolling in India
The Local ^

Posted on 12/01/2012 2:28:45 PM PST by nickcarraway

Swedish retailer Ikea said Friday it was reviewing sweeping curbs imposed on what it can sell at its planned new stores in India. One will reportedly prevent it offering its famed meatballs.

India's foreign investment panel has rejected 15 of Ikea's 30 product lines, a report said on Friday, underscoring the regulatory hurdles faced by foreign stores who are eyeing the Indian market with renewed interest.

"We are now internally reviewing the details (of the investment board's decision)," an Ikea spokeswoman told AFP, adding that she could not confirm the curbs as reported by The Economic Times on Friday.

Among the lines Ikea has been told by the Foreign Investment Promotion Board that it cannot sell are gift items, fabrics, books, toys, consumer electronics, and food, the newspaper reported.

The group will, however, be allowed to sell furniture -- its core business.

The investment panel also reportedly told Ikea it cannot offer customer financing schemes because that would violate banking regulations, or open cafes and food markets because that would break food policy regulations.

Ikea's entry into India -- it has pledged to invest $1.9 billion in the coming years -- is being closely watched by competitors as a test case for how a large foreign corporation negotiates India's byzantine rules and red tape.

India's government announced a string of pro-market and investor-friendly reforms in September that relaxed or removed barriers preventing foreign retailers from operating in the country.

Ikea hopes to open 25 of its trademark blue-and-yellow stores in India through a 100-percent owned unit, Ingka Holding, as part of a wider push into emerging markets like China and Russia.

The government initially insisted that Ikea obtain 30 percent of its supplies from small Indian manufacturers that the Swedish retailer feared would not be able to keep pace with demand.

Later the government dropped the demand specifying the size of the supplier, but kept the 30 percent local sourcing requirement.


TOPICS: Business/Economy; Food
KEYWORDS: india

1 posted on 12/01/2012 2:28:47 PM PST by nickcarraway
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To: nickcarraway

Stuff like this is why despite never having had a full command and control centrally-planned economy in its history, India is a relative backwater compared to China. What’s astonishing is that Vietnam, whose economy was destroyed via a combination of war and communist rule, will overtake India with respect to GDP per capita in a couple of years, despite having undertaken economic reforms almost a full decade later than China.


2 posted on 12/01/2012 2:42:15 PM PST by Zhang Fei (Let us pray that peace be now restored to the world and that God will preserve it always.)
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To: nickcarraway

I went to IKEA some months ago with my wife to buy new drapes for the window. I wanted a drape to cover the bottom half of the window because I like natural light and to look at the sky.

The IKEA lady told us it wasn’t worth their cost to cut drapes in that size and directed us to go to a place across the parking lot, which we did with no problem.

I told my wife: Only we can get kicked out of IKEA like this. Everyone else is chopping and pasting and bolting.


3 posted on 12/01/2012 2:46:03 PM PST by Berlin_Freeper
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To: nickcarraway; All

I am sure all the Free Trader Globalists who cheer-lead about India will find some way to spin this

India is still pretty much a Third World Hole, with worse living standards than all of Central America. IKEA should concentrate on areas that will allow their stores into their nations without red tape

Even as cheap as IKEAs products are....95% of Indians cannot afford them


4 posted on 12/01/2012 2:50:48 PM PST by SeminoleCounty (Illegal Aliens do not pay Social Security...Employers do)
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To: SeminoleCounty
IKEA should concentrate on areas that will allow their stores into their nations without red tape

So you are saying they should close stores in the U.S.?

5 posted on 12/01/2012 2:58:35 PM PST by nickcarraway
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To: SeminoleCounty
I am sure all the Free Trader Globalists who cheer-lead about India will find some way to spin this

What's to spin? India is still a corrupt, bureaucratically-controlled kleptocracy that is starting to prosper despite itself. I suspect you agree with all the regulation given your comment.

6 posted on 12/01/2012 3:15:18 PM PST by BfloGuy (Workers and consumers are, of course, identical.)
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To: nickcarraway

Ikea sells ‘famed’ meatballs? Who knew.


7 posted on 12/01/2012 3:19:33 PM PST by wildbill (You're just jealous because the Voices talk oMnly to me.Reid)
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To: Zhang Fei
I disagree that India is a "backwater compared to China." They have a more robust concept of property rights and contract law thanks to the British Raj-- critical pieces of legal infrastructure that China lacks.

China can build ghost skyscrapers and empty shopping malls with slave labor, but in the end India will leave them in the dust.

8 posted on 12/01/2012 3:22:24 PM PST by hinckley buzzard
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To: Berlin_Freeper

I had never heard of Ikea till I moved to Slovakia.
I thought the store was great, and bought many of my furnishings there.
Even better is the way the furniture is broken down and packaged. I was able to ship my computer desk, book shelves, a three drawer unit, and my computer swivel chair when I moved to the Philippines, and all was in just a few boxes.


9 posted on 12/01/2012 3:27:49 PM PST by AlexW
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To: hinckley buzzard
I disagree that India is a "backwater compared to China." They have a more robust concept of property rights and contract law thanks to the British Raj-- critical pieces of legal infrastructure that China lacks.

China can build ghost skyscrapers and empty shopping malls with slave labor, but in the end India will leave them in the dust.

If India had a robust concept of property rights and contract law, it would now be a developed country on par with the US and have an economy 4x ours. Instead, the annual per capita GDP is around $1500 a year, compared to China's $5400, and Vietnam's $1400. If China's is slave labor force, India's would be a sub-slave labor force, given that incomes are about 1/4 China's.

10 posted on 12/01/2012 3:37:26 PM PST by Zhang Fei (Let us pray that peace be now restored to the world and that God will preserve it always.)
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To: AlexW

See what I mean?
I failed at curtains!


11 posted on 12/01/2012 3:54:20 PM PST by Berlin_Freeper
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To: hinckley buzzard
Let me point out that spectacular real estate busts are not exclusively a Chinese phenomenon. The Asian crisis of the late 90's saw large amounts of both empty and halfway-built malls and apartment buildings. The oil patch real estate bust that killed the S&L's was pretty bad, but we outdid ourselves in the post-9/11 years with the MBS crisis. Dubai has obviously seen an epic bust in recent years relative to the size of the economy.

Bottom line is that China's economy is going through a down cycle, just like every other capitalist economy, with one key difference - unlike many of these other places, it actually went through a massive boom before going through the bust (if 7.5% growth can be described as a bust). India's growth has slowed to 5.3%. Where were India's years of double-digit growth - encountered by every East Asian tiger economy from Singapore, Hong Kong, South Korea and Taiwan during their fast growth years? Ultimately, India's economy is a relative backwater that, although large in aggregate due to its population size, has been mismanaged since its independence in 1948, in part due to its callous disregard for both property rights and contract law.

12 posted on 12/01/2012 3:57:52 PM PST by Zhang Fei (Let us pray that peace be now restored to the world and that God will preserve it always.)
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To: nickcarraway

I once bought an entertainment center from IKEA. I’m convinced that IKEA is Swedish for: “Here is a box of wood and some glue, dumba$$!”


13 posted on 12/01/2012 4:41:28 PM PST by RobertClark (Inside every "older" person is a younger person wondering what the hell happened?)
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To: nickcarraway
The group will, however, be allowed to sell furniture -- its core business.

That certainly seems like something to work with. If they want to make food available at their outlets, hiring a local contractor might work.

14 posted on 12/01/2012 4:47:57 PM PST by Tax-chick (Did you dust your ceiling-fan blades? Now it's too late!)
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To: nickcarraway

The meatball could be someone’s mother.


15 posted on 12/01/2012 4:50:15 PM PST by bmwcyle (Women reelected Obama)
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To: SeminoleCounty
IKEA should concentrate on areas that will allow their stores into their nations without red tape

Yup, that and concentrate on nations where the sun rises in the west, wears a happy smile on it's face all day and waves goodbye as it sinks below the eastern horizon every night.

India is horribly over-regulated and infested with useless politicians and corrupt bureaucrats who provide taxpayers with nothing for their taxes except ever increasing demands for money. So is China. So are the nations of Europe. And so, increasingly, is the US.
16 posted on 12/01/2012 4:51:12 PM PST by AnotherUnixGeek
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To: BfloGuy

What’s to spin? India is still a corrupt, bureaucratically-controlled kleptocracy that is starting to prosper despite itself. I suspect you agree with all the regulation given your comment.


And you just proved my point...”Free Trader Globalists will spin this...”. Unreal


17 posted on 12/01/2012 4:55:15 PM PST by SeminoleCounty (Illegal Aliens do not pay Social Security...Employers do)
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To: Zhang Fei

India is as corrupt, if not more so, than Mexico.


18 posted on 12/01/2012 4:57:50 PM PST by Mamzelle
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To: SeminoleCounty
And you just proved my point...”Free Trader Globalists will spin this...”. Unreal

And you prove mine. There is a breed of so-called conservative that yearns for government control even while pretending to despise it. This time, he claims, the government will do right.

19 posted on 12/01/2012 5:03:53 PM PST by BfloGuy (Workers and consumers are, of course, identical.)
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To: nickcarraway
I don't know about the meatballs, but IKEA’s powdered eggs are the powdered egg gold standard.
20 posted on 12/01/2012 5:36:56 PM PST by PUGACHEV
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To: AnotherUnixGeek

“India is horribly over-regulated and infested with useless politicians and corrupt bureaucrats who provide taxpayers with nothing for their taxes except ever increasing demands for money.”

Perfect one-sentence description.


21 posted on 12/01/2012 5:48:30 PM PST by Jack Hammer
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To: SeminoleCounty
Easily spun: India and cows. Cow are sacred, not food.

End of puzzle.

Impeach the kenyan or secession.


22 posted on 12/01/2012 6:27:00 PM PST by ex91B10 (We've tried the Soap Box,the Ballot Box and the Jury Box; ONE BOX LEFT!)
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To: nickcarraway

FWIW, Indians like the USA and Israel. China (and most countries) does not.


23 posted on 12/01/2012 6:51:21 PM PST by PghBaldy (Pete Hoekstra RE: Petraeus scandal - "There's more here than meets the eye.")
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To: Zhang Fei; hinckley buzzard
If India had a robust concept of property rights and contract law, it would now be a developed country on par with the US and have an economy 4x ours.

The US used to have a robust concept of property rights. Now we have less than we used to.

The point of property rights is not just that you have ownership on paper, but that you are able to USE your property as you see fit, without having to grease the palms of a bunch of politicians and bureaucrats to do it, to get waivers from stifling regulations and not having inspectors continually on your back.

In Third World countries, the Elites encourage corruption in government officials by design. This corruption stifles the unconnected middle class from being able to create wealth. Meanwhile, the corrupt bureaucrats do not bother the "connected".

24 posted on 12/02/2012 6:07:39 AM PST by PapaBear3625 (You don't notice it's a police state until the police come for you.)
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To: PapaBear3625
The point of property rights is not just that you have ownership on paper, but that you are able to USE your property as you see fit, without having to grease the palms of a bunch of politicians and bureaucrats to do it, to get waivers from stifling regulations and not having inspectors continually on your back.

In Third World countries, the Elites encourage corruption in government officials by design. This corruption stifles the unconnected middle class from being able to create wealth. Meanwhile, the corrupt bureaucrats do not bother the "connected".

Enron got all the official check-offs in India. They were stiffed anyway, to the tune of $900m. Stories like Enron's are why for foreign corporations, India is pretty low on the list of investment destinations. The scale and pervasiveness of theft (private and public) is not only mind-boggling, it serves to actively depress economic activity.

25 posted on 12/02/2012 7:18:18 AM PST by Zhang Fei (Let us pray that peace be now restored to the world and that God will preserve it always.)
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To: Zhang Fei

In India, they do not go after much of the theft, because the government relies on the votes of the thieves (a lot like some of our cities). In China, a thief who steals from the Party is likely to wind up dead.


26 posted on 12/02/2012 7:55:17 AM PST by PapaBear3625 (You don't notice it's a police state until the police come for you.)
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To: PapaBear3625
In India, they do not go after much of the theft, because the government relies on the votes of the thieves (a lot like some of our cities). In China, a thief who steals from the Party is likely to wind up dead.

If theft from the Party was punished with death, the entire Communist Party would be in one mass grave, and the Chinese would be fighting a civil war to determine who gets to run the place next. Xi Jinping's and Wen Jiabao's families are worth hundreds of millions of dollars. The real difference between China and India is probably similar to an anecdote (probably recycled more than once) I heard a while back about a South Korean student and an African student who meet at an American college and become good friends. These students graduate and establish careers in government back in their home countries, while remaining in contact.

Years later, the South Korean bureaucrat decides to invite his African buddy over for a visit, in part to reminisce, and in part to show off. He picks the guy up at Seoul's spiffy new airport in his late model, mid-range Beemer and chauffeurs him to his roomy (by Seoul standards) and well-furnished three-bedroom apartment with a killer view. His African buddy is all impressed and asks him how he affords all this on a civil service salary. The Korean bureaucrat says "Remember that spanking new highway I took to get you here? 1%". After partaking of all that Seoul has to offer, the African bureaucrat returns home.

A few months later, he invites his Korean buddy to visit him in Africa. At the airport in Africa, the Korean guy is picked up by helicopter and is deposited by the pilot at a landing strip within a walled compound the size of the Buckingham Palace grounds. A veritable army of domestics converges upon him, offering him trays of refreshments and finger foods. As the Korean guy enters a palatial air-conditioned structure, his African buddy makes a grand entrance with half-a-dozen expensively-dressed and gorgeous wives and/or concubines. Completely flabbergasted, the Korean functionary blurts out a question that's been nagging at him since the helicopter picked him up - "How do you afford all this on a civil service salary?" The African bureaucrat responds with a question - "Remember that spiffy new highway you saw on your helicopter ride here?" The Korean fella says "There was a highway? All I saw was dirt roads." The African guy chuckles "Precisely - 100%".

27 posted on 12/02/2012 8:54:32 AM PST by Zhang Fei (Let us pray that peace be now restored to the world and that God will preserve it always.)
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To: Zhang Fei

Your right, china is better suited to be part of the western economic model. china wishes to emulate japan and germany. India wishes to remain sovereign. The goals are different

India is not traditionaly a willing exporter, very little reasons/products exist for it be a large importer with the exception of energy or gold(for religious reasons).

Thorium reactors take time when under sanctions.

The Indian government prefers waiting for indiginous trade models to emerge. Ever see a bunch of garbage on a new road? Economic models, like currency models, are deceptive. There is a reason why practically the entire planet, including the chinese, use Indian mathematical models and number systems instead of roman numerals or the chinese equivalent.

It is not Indian investment/money tied up with the future of the western economy. Like the citizens of America who are forced to insure the mistakes of their wealthy on wall street, so to is Beijing forced to insure the lending of credit to its customers in perpetuity.

Chinas future was decided the minute it started building huge ports and cargo ships without holding any territorial rights outside of China.

India is free and poor. Not so long ago the europeans looked down their collective noses at the free and poor americans.


28 posted on 12/05/2012 6:30:18 AM PST by Salt
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To: Salt
India is free and poor. Not so long ago the europeans looked down their collective noses at the free and poor americans.

Actually, the US has been richer than Europe on a per capita basis for pretty much its entire existence. This was why hordes of Europeans settled in America. The European elite's contempt had to do with the US's non-aristocratic (and in many cases, ex-convict) bloodlines and to some extent, the view that this country had money while lacking taste. The European hoi polloi shared none of this contempt, which was why so many headed for these shores.

29 posted on 12/05/2012 5:48:13 PM PST by Zhang Fei (Let us pray that peace be now restored to the world and that God will preserve it always.)
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To: nickcarraway

IKEA is magic. I am instantly happy when I step into the place.


30 posted on 12/05/2012 5:50:47 PM PST by riri (Plannedopolis-look it up. It's how the elites plan for US to live.)
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To: Zhang Fei

There are many countries that have greater per capita levels than those enjoyed by Americans today. Doesn’t mean they don’t bow to Washington or pay tax to them in the form of ‘investment’. Doesn’t mean the Washington elite don’t look down their collective noses at them. India is poor in wealth not in power.

India doesn’t pay tax to a foreign power, neither did the Americans after their civil war.

China does. That is the difference between the two.


31 posted on 12/05/2012 7:19:30 PM PST by Salt
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To: Zhang Fei; Salt
Indian economy isn’t going to come down crashing because Ikea isn’t able to sell their crappy meatballs. There are multinationals businesses opening shops in India as fast as they are shutting down here in US. Even a slowing down 5.3% would be a dream growth rate for US or Europe. Obama government has been fudging up scam growth figures with massive government capital spending while the 5.3% for India is ACTUAL market economic growth. Inflation is still under control and interest rates are not extremely high, there is still plenty of liquidity in the market its just a bad year for India.

As for Enron...... Enron was a huge scam in the US, let alone in India. There is general slowdown of investment world wide. Got nothing to do with Enron or India.

32 posted on 12/07/2012 10:34:08 AM PST by ravager (I)
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To: Zhang Fei

Absolutely spot on.

Indian bureaucracy kills marketplace innovation. What we see in this story is just a high-profile example.


33 posted on 12/07/2012 10:46:52 AM PST by FreedomPoster (Islam delenda est)
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To: wildbill

>>Ikea sells ‘famed’ meatballs? Who knew.

Tasted like beef and pork to me. I’ve never seen a famed,
not sure what that would taste like.

I can’t see how anyone with half a clue would have even tried selling Ikea meatballs in India, a place where 4/5ths of the people won’t eat beef because they see cows as sacred, and 1/6th of the people won’t eat pork because they see it as unclean.


34 posted on 12/07/2012 10:52:52 AM PST by FreedomPoster (Islam delenda est)
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To: nickcarraway

The IKEA folks didn’t slip enough money to the right folks.


35 posted on 12/07/2012 11:01:00 AM PST by Little Ray (Get back to work. Your urban masters need their EBTs refilled.)
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To: FreedomPoster

Bingo! Not to mention that Italian meatballs are best anyway.


36 posted on 12/07/2012 3:08:04 PM PST by wildbill (You're just jealous because the Voices talk oMnly to me.Reid)
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