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Ikea dismantles plans for stores in India

AFP/The Local · 11 Jun 2009, 12:59

Published: 11 Jun 2009 12:59 GMT+02:00

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Ikea spokeswoman Charlotte Lindgren said a rule preventing stores being 100 percent foreign owned was the reason behind the move.

"We have been having problems with the regulations in India so we took the decision to postpone our expansion because we want to have full ownership of our retail operations," Lindgren told AFP, denying that the global economic slowdown had influenced the move.

Indian regulations cap foreign investment in single-brand retailers at 51 percent.

Ikea said India remained "a long term potential market" and would continue to lobby for the existing regulations to be changed.

"If and when changes are made to the FDI (foreign direct investment) regulations allowing 100 percent ownership of single brand retailers then Ikea will reconsider its position," the company said in a statement.

The company's comments came after India's Economic Times reported earlier on Thursday that the Swedish company's planned $1 billion entry into the Indian market had been put on hold after talks with the government broke down.

Story continues below…

Ikea announced in 2006 that it wanted to open its first store in India by 2011.

AFP/The Local (news@thelocal.se)

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Your comments about this article

17:31 June 11, 2009 by Black Pharoah
The Indians are being greedy.
05:53 June 12, 2009 by hindby
A lot of products are sourced from India by IKEA. Indian companies can easily use the opportunity and capture the market long before IKEA enters the market whenever it does.
07:53 June 12, 2009 by Ranjit T Edward
It not being greedy BP it is about have the right policies in the interest of their own. This is what has made India the power house it is today.
08:28 June 12, 2009 by Faunaman
We should do the same with them by not allowing any indian to open a restaurant or a shop unless co-owned with a european national.

A few thousands of indians have lost the chance to get good work conditions, maybe that´'s the reason for all this, the indian government wants to keep indians workers in slavery standards
09:04 June 12, 2009 by Nemesis
This is simple economic warfare on the part of India.

If they want it, fair enough give them it. As Euroepan goods are obviously not welcome in India, ban all Indian goods in the European market.

The reversal in GDP that would occur due to that, will wake them up.
15:21 June 15, 2009 by justanotherexpat
Grrr! Raawwwr! Rattle the sabres! Curse the darkies! Defend the faith! Grab your pitchforks! Run for the hills! Kick 'em all out!

people get a grip.......like IKEA is some kind of shining example of corporate ethics......"slavery conditions"? "economic warfare?" "ban all Indian goods in the EU"?.........listen to yourselves.......

Learn some history about Indian business practices since the mid 1980s and you might understand why they're cautious.
06:55 July 5, 2010 by Wanna be Swedish One day
Well, if you all think about a bit indeed. I think it is kinda smart for India to do that. They don't want a monopoly business mindset. Anyway, just a thought late at night. I just celerbrate the 4th of July here and the time is past midnight.
21:49 October 4, 2011 by agnelo
Sorry Swedes, The 1.2 Billion Indians will Love IKEA come to india. Its the greedy Politician and some Greedy Industrialist, who create and nourish permit raj that block such entries. Dont give up easily, then you fall prey to these thugs. In India patience and perseverance pays. If you like I will lend IKEA any kind of partnership and not take a dime. I live/work in Dubai. alobo05@yahoo.com. Welcome to India.
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