End of puzzle.
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.
“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.
End of puzzle.
FWIW, Indians like the USA and Israel. China (and most countries) does not.
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".
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.
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%".
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.
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.
IKEA is magic. I am instantly happy when I step into the place.
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.
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.
Absolutely spot on.
Indian bureaucracy kills marketplace innovation. What we see in this story is just a high-profile example.
>>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.
The IKEA folks didn’t slip enough money to the right folks.
Bingo! Not to mention that Italian meatballs are best anyway.
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