Amid reservation over the 30 per cent sourcing clause for 100 per cent FDI in single brand retail by multinationals, the Indian government has announced that Swedish furniture retailer IKEA’s Chief Executive Officer Mikael Ohlsson met Commerce Industry and Textiles Minister Anand Sharma in Paris recently.
According to an official statement, Ohlsson has expressed willingness to be involved in strengthening of SMEs in India.
Ohlsson is reported to have shared his views on the local sourcing clause in the FDI policy with regard to single brand retail.
Earlier this month the government had notified opening of 100 per cent FDI in single brand retail, with a clause of 30 per cent mandatory sourcing from SMEs.According to the statement, Ohlsson would soon visit the country to meet officials and stakeholders.IKEA has already stated that the sourcing clause “might be difficult for us to live up to”.
The Scandinavian furniture retailer that has been waiting to set up shops in India on its own for a long time had welcomed the government’s moved but had expressed reservations over the sourcing clause.Just two months ago, the company was almost on the verge of announcing its foray into the Indian market but had deferred it following uncertainties due to political opposition to the government’s decision to relax FDI norms in retail, including 51 percent in multi-brand retail.
According to IKEA’s latest statement, India is still an interesting potential retail market for the company.