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Ikea clears major hurdle in India expansion bid

India's foreign investment panel has cleared a nearly $2-billion plan by Swedish furniture giant Ikea to open its stores in the country as it seeks new markets for its flat-pack products.

Ikea clears major hurdle in India expansion bid

Two months ago, the Foreign Investment Promotion Board rejected 15 of Ikea’s 30 product lines, including food and textiles, underscoring the regulatory hurdles faced by foreign stores hoping to enter the Indian market.

But late on Monday, commerce minister Anand Sharma said that the investment board had cleared the plan.

“This is a positive development,” Sharma said.

“The government is committed to playing a constructive role in encourage foreign direct investment.

Ikea had told the Indian government the company must be allowed to retain its “global model” in India, retailing all of its products and running its in-store restaurants as it does in every country where it has operations.

Reacting to the announcement, Ikea said the clearance of its proposal by the foreign investment panel “as per the Ikea concept” was “an important milestone in the application process”.

“We consider this as a very positive development,” Juvencio Maeztu, Ikea country manager, said in a statement.

“We are now waiting for approval from the cabinet and subsequently a notification so that we can initiate the process of establishing Ikea stores in the country,” Maeztu said in a statement.

Clearance from the Indian cabinet was expected to be forthcoming after the commerce minister said late last month that “we accept their global model” and “we see no reason why their global model has to be changed in any manner.”

Ikea’s entry into India — it has pledged to invest $1.9 billion in coming years — is being closely watched as a test case for how a large foreign corporation negotiates India’s byzantine rules and red tape.

The government in September announced a string of pro-market and investor-friendly reforms that relaxed or removed barriers to foreign retailers.

Ikea, which submitted its application last June, hopes to open 25 of its stores in India through a 100-percent owned unit, Ingka Holding, as part of a wider push into emerging markets such as China and Russia.

Ikea, which in 2009 scrapped plans to enter the market due to regulatory concerns, says it has a “long-term vision” for India and sees huge potential in its burgeoning middle class.

AFP/The Local/dl

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WEATHER

Danish Ikea store shelters staff and customers overnight during snowstorm

Heavy snowfall left 31 people looking for a spare cushion at the Aalborg branch of Ikea on Wednesday as they were forced to spend the night at the store.

A file photo at Ikea in Aalborg, where 31 people stayed overnight during a snowstorm on December 1st 2021.
A file photo at Ikea in Aalborg, where 31 people stayed overnight during a snowstorm on December 1st 2021. Photo: Henning Bagger/Ritzau Scanpix

Anyone who has found themselves wandering the mazy aisles of an Ikea might be able to empathise with the sense of being lost in the furniture store for a seemingly indefinite time.

Such a feeling was probably more real than usual for six customers and 25 staff members who were forced to spend the night at the furniture giant’s Aalborg branch after being snowed in.

Heavy snow in North Jutland brought traffic to a standstill and halted public transport in parts of the region on Wednesday afternoon, resulting in a snow-in at Ikea.

“This is certainly a new situation for us,” Ikea Aalborg store manager Peter Elmose told local media Nordjyske, which first reported the story.

“It’s certainly not how I thought my day would end when I drove to work this morning,” Elmose added.

The 31 people gathered in the store’s restaurant area and planned to see Christmas television and football to pass the evening, the store’s manager reported to Nordjyske.

“Our kitchen staff have made sure there is hot chocolate, risalamande, pastries, soft drinks, coffee and the odd beer for us in light of the occasion. So we’ll be able to keep warm,” he said.

“We couldn’t just send them outside and lock the door behind them at our 8pm closing time. Absolutely not. So of course they’ll be staying here,” he added.

The temporary guests were given lodging in different departments of the store in view of the Covid-19 situation, Nordjyske writes.

“For us , the most important thing was to take care of each other and that everyone feels safe,” Elmose said.

At least Ikea’s stranded customers and staff had somewhere comfortable to lay their heads.

The same can unlikely be said for around 300 passengers at the city’s airport who had to stay overnight at the terminal.

The airport was forced to stop flights from 2:30pm yesterday amid worsening weather, which also prevented buses from transferring passengers to hotels.

“We have around 300 people in the terminal right now and have been giving out blankets on the assumption they will be staying here tonight,” Aalborg Airport operations manager Kim Bermann told Nordjyske.

READ ALSO: Ikea reopens in Denmark after country’s worst retail month this century

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