 "Ikea, Pavers England one step closer to India play")
While Swedish retailer Ikea has finally filed the last part of its India application following the relaxation of rules on sourcing from local suppliers, the UK’s Pavers England too has got closer to launching its stores in India.
Ikea will maintain two separate companies in India, one for sourcing and the other for local retailing which would have foreign investment.
Pavers England’s application has been cleared by the Department of Industrial Policy and Promotion (DIPP) and will be taken up by the Foreign Investment Promotion Board.
“Pavers has carried out all the paperwork to transfer the brand to the Mauritius joint venture. Now that the ownership of brand clause has also been relaxed for foreign retailers in the revised policy, there is no problem at all,” a government official told the Economic Times.
[caption id=“attachment_484036” align=“alignleft” width=“380”]  Reuters[/caption]
In a revised application to the Department of Industrial Policy and Promotion (DIPP), Ikea said: “Activities such as range development, sourcing and retail functions are conducted by appropriate separate entities within the IKEA Group which have the necessary expertise to carry out such functions.”
It also said it would comply with the statutory 30% sourcing from India and preferably from local small and medium vendors as mandated by a latest clarification from the government.
India opened the FDI door to foreign retailers in January, but drew criticism for demanding that companies source 30 percent of their products from small- and medium-sized domestic firms.
Impact Shorts
More ShortsIKEA and UK-based footwear retailer Pavers England have been the only two firms to apply for fully-owned subsidiaries in India since the government allowed single-brand retailers to own up to 100% overseas ownership.
The move is likely to help fast track pending applications of other brands like Massimo Dutti and Promod.
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