The Foreign Investment Promotion Board (FIPB) has cleared Swedish furniture major
IKEA's Rs 10,000 crore proposal to set up 25 stores in India. The clearance
includes permission to set up cafes in its outlets.
The move is a positive signal to other foreign single-brand retail chains looking to invest in India.
FIPB, which is the nodal agency for approval of
foreign direct investment (FDI) proposals, had earlier permitted IKEA to invest Rs 4,200 crore to open single-brand retail stores.
IKEA Group, which manufactures and sells home and office furnishing products, proposes to invest in single-brand retail trading in India through a 100 per cent subsidiary, Ingka Holding Overseas.
In January 2012, the central government had allowed 100 per cent FDI in single-brand retail. In September 2012, it also opened the doors to foreign supermarket chains, allowing 51 per cent FDI in multi-brand retail.
The
IKEA proposal will now be placed before the Cabinet Committee on Economic Affairs (CCEA) for final approval. The clearance, coupled with the investor friendly environment the government has been trying to present through various reforms, is expected to breathe new life into the country's retail sector.
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