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Ikea can't get the meatball rolling in India

23 Nov 2012, 11:56

Published: 23 Nov 2012 11:56 GMT+01:00

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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.

Story continues below…

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

AFP/The Local

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Your comments about this article

15:46 November 23, 2012 by jmclewis
A backwards country like India want to tell private business how to run, maybe this why they are in the third world.
16:35 November 23, 2012 by saisandeep
@ jmclewis

India aint a backward country. every country has its own regulations. if an indian company wants to setup its store here even sweden would have regulations. cows are considered to be sacred and nobody eats them so there is no way it can be sold in india. being an indian i can understand that but i seriously dont understand wat the problem with other stuff is.......after being in sweden for 2 years if i go back to india and find IKEA there the first thing i would look for would be meatballs and then korv after that i would shop....i feel dissapointed that they made this decision.... but it aint nicee to call India a backward country or a third world country...
17:05 November 23, 2012 by skogsbo
Jmc, in 20-30 years India could easily be the 2nd most powerful nation in the world.
18:07 November 23, 2012 by Mukr
@jmclewis: Just look at how PVT business run in India,they were top millionaires here and you will find 2-3 people in world top ten list.SO,its not about teaching..its just a fact most of Indians don't eat cow and even if you allowed to sell it will be loss for them and making controversy. A clever business man sells what actually crazy in that place.once clothing Industry was Sweden main business..now India is playing major role here...When Indian products were exported to Sweden how many rules and regulations it should pass and only rejecting some stuff from Sweden makes India a third world now...so,do you think a third world should accept every thing a first world want to sell......if so,Ikea should be in wrong place and we didn't got Independence for that reason.
20:06 November 23, 2012 by Freelife

Dear sir,

Sweden too is in the Third World . FYI. http://en.wikipedia.org/wiki/Third_World

India is in third world because India didn't favor the US or the USSR during the cold war.

IKEA cannot sell anything in India. IKEA is a furniture company, hence they will only only furniture. Why do they want to sell textile, food etc in India? India has allowed for only SINGLE BRAND FDI.

If IKEA doesn't want to do business in India, India doesn't have a thing to loose. Companies have queued up to do business in India.

And regarding private businesses, do you know the name Tata, Birla, Reliance, Kingfisher, UB group, Infosys, Wipro, Kirloskar, Bharathi, Mittal, etc etc etc. ?
21:35 November 23, 2012 by swenrika
@ jmclewis, seems a lot disagree with your short-sighted view. Have a look at what India has achieved, their GDP and ask yourself "why are so many companies invest in INDIA" and none are investing in SWEDEN.. answer is easy. Sweden is soooooo much more advanced and so much more civilized and so much more cultured and... and.. and...

that is why people die in Hospital in Sweden and ambulances are not dispatched and people in need are asked what color they are before help is dispatched.

Wake up and smell the roses.
22:23 November 23, 2012 by Solarsystem
@ jmclewis

India may be backward, at the moment, but soon will catch up and leave the majority behind . . . . . but what I do not agree is 'A backwards country like India want to tell private business how to run'.

Indians have the buying power, so it makes a good market for the 'developed' countries to sell stuff from high end military aircrafts to sanitary pads . . . . hence they decide how private business should be run in India. Who is the one wanting to make business ? ? ?

Sharp comments are welcome, but not harsh ones, I hope you are 'forward' enough and come from the 'first' world country to understand what I mean :)
11:28 November 24, 2012 by 78294624673872845638392938
@ Freelife

Lets get with the times, countries are no longer referred to as Third World. Like you said yourself, that was during the Cold War. Sweden was only listed as a third world country because they did not support NATO due to their neutrality. Now we have core, semi peripheral and peripheral countries… and Sweden is a core country while India is semi peripheral.

And since we like to cite wikipedia so much: http://en.wikipedia.org/wiki/Core_countries
12:27 November 24, 2012 by wakak

India is not more backward than Sweden, but your comment is certainly backward.

I would rather see banning Ikea meatballs as a sign of high culinary standards. Let's be honet, Ikea meatballs are not the most sopisticated dish on earth, especially when compared to Indian culinary delights.
14:05 November 24, 2012 by Freelife

Thank you sir for the information. So you do agree that the usage of the term "Third world" is not apt.

Now Sweden, a core country has 9.5 million people, and India a semi-periphery country has 1.2 billion people.

(9.5 million * 100) / 1.2 billion = 0.79166666666. The Sweden is 0.791666666% of India.

Now, I assume Sweden is a great country which is a champion of equality and socialism. Right?!

So, when IKEA wants to sell everything including textile (which a major produce in/from India) in India, they should be allowed with a question so that 9.5 million people use 1.6 billion just as a market.!

Why cannot IKEA open more industries, more factories in India and provide employment to Indians? Why should such a big company see India just as a market not as a partner? IKEA can easily make many partners and share the profit.

Read about how Toyota and Hyundai are making an excellent businesses in India.


IKEA is not allowed to sell any food in India because India has allowed only SINGLE BRAND FDI (foreign direct investment). The brand product of IKEA is furniture not food. It has nothing to do with any religious or culinary reasons.

In India, a lot of people do eat beef in the Northeast and the South of India especially in Kerala and Tamil Nadu .
01:02 November 25, 2012 by stev
IKEA should think outside the box and produce a curry meatball. Make it flippin hot and it will sell like hot cakes haha. Just saying ;-)
08:55 November 25, 2012 by Freelife


Indian meatballs are called 'Kofta' .
19:33 November 25, 2012 by Navras
Ikea should concentrate on its core business. As such the food business is not profit making business for Ikea.

In India hindus ,muslims dont eat cows and pigs. Its better to sell samosa, pakora, chaat or something else.

It would be better if Ikea outsource some of the space to local restaurants and make profit from it.

The funiture, kitchen grocery are big household items. Moreover Ikea has to follow rules of native country.
19:55 November 25, 2012 by tr2001
This shouldn't be an issue considering IKEA food is bad and tasteless, also there is an asian version of meatball which is called kofte and more tasty than köttbullar. Origin of meatball actually from Asia not Sweden so it's better not to sell India tasteless and dry version of their own food and just stick with selling furniture upon mutual agreement.
09:21 November 26, 2012 by Andrew
India should consider that opening an IKEA store generates more employment. It also brings Sweden's culture of home furnishing into people's home. Just like any retailers, it aims to bring not only the core business but suppling a complete package.

Providing customer a place to rest and have something to eat is part of customer service. If you think Swedish food is tasteless, don't eat or buy it. This is your freedom. Controlling how a business is sources its products and operates defeats the purpose.
10:58 November 26, 2012 by Some_Random_Guy
to all of you who are considering that Ikea is doing a favour to India by opening its stores by investing billions in the third world country like India:

1) Ikea is of course generating employment but it's sourcing(or planning to source) almost 70% from Abroad i.e, not from India so in that sense its bad for small business and people who normally source the stuff to Indian customers.

2) Some one joking about what the shoppers should eat at Ikea, come on growup guys…every country has its own taste of cuisine and india unlike Sweden has 28 states(not to mention 7 union territories) internally which has almost their own cuisine which is absolutely different from the rest of all states. And now if you imagine that if they have such a huge diffidence among India itself how in the world can you expect meat balls will savor the taste buds of all the Indians...

3) Some bozo joking about India as a third world country…ha ha..that clown should grow up and come to reality that if you don't have your business in India, China(& of course uncle SAM) then you are NOT doing business abroad so please break this reality distortion of yours. Please go though the statistics instead if you want some hard core answers.

4) Finally Ikea is NOT going to India to help the poor Indian's from their misery or doing any charity BUT to do business for itself.

5) Last but not the least Sweden is making much more money with its business in India than the Indian business running in Sweden. So I don't think I have much to pen and I rest my case.
16:32 November 26, 2012 by indianinvaxjo

Seriously man !! I don't know where you're from, but you are so ignorant !! Grow Up !!
09:43 December 23, 2012 by agnelo
99% Indian politicians are thug and murderers and rapist. (http://www.ndtv.com/video/player/news/criminals-dominate-up-politics/11413)

They are just trying to extract bribes by these delaying tactics. Who the hell is the indian govt, to dictate what the indians should eat or should not. Indian love IKEA and waiting with open arms to welcome. Corrupt Politicals class & its accompolice which consitutes only 0.1% of india rule & rob the indian poor. Thats why 500 million indians are beggers and this 0.1% has over USD 200 trillion in swiss and foreign banks. IKEA please dont give up on the indian and dont give in to these thugs. Once in, the Indian will welcome you and welcome you in every state and city. Welcome to INDIA. WE love the swede, we love IKEA.
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