Ikea CEO Mikael Ohlsson to meet Anand Sharma on retail

NEW DELHI: Swedish retailer Ikea is sending its top executive to India to seek more clarity from the government on its recently liberalised norms for single-brand retail, raising hopes that foreign investors may finally be warming up to the new policy.Thegovernment had in January removed the 51% foreign direct investment cap insingle-brand retail, subject to the condition that investors source at least 30%of their inputs from domestic small-scale producers.But till dateonly one company, UK-based footwear maker Pavers England, has applied forlicence to set up a shop on its own in India."Ikea had many queries that our officials have already addressed," commerce and industry minister Anand Sharma told ET. "The company's CEO Mikael Ohlsson will be in Delhi later this month to discuss the issue further."Ohlsson had met Sharma in Parisat the India-France CEO's Forum in January and raised his concerns over themandatory domestic sourcing requirement. Sharma said it was possible for mostretailers to meet the sourcing requirement. "What is required is a properunderstanding of the policy," he said.The minister said sourcingfrom small and medium enterprises for manufacturing items that are exportedwould also be counted towards meeting the 30% domestic sourcing obligation. Thiswould help foreign retailers already sourcing from India for their globalchains."About 30% of Ikea's sourcing for its global operations isfrom India and many of the suppliers are small enterprises, particularly whenyou look at items such as handlooms and carpets," Sharma said.Theyare already engaged with farmers and cooperatives and are doing a lot of workwith them, he added.Ikea had earlier expressed strong reservationsabout the domestic sourcing clause. Reports quoted Ohlsson saying that the localsourcing rules were more easily met by food retailers than single-brandcompanies with established global product ranges.