India's Foreign Investment Promotion Board (FIPB) has cleared the Rs 10,500-crore investment plan by Swedish furniture giant IKEA to set up a 100 percent subsidiary in India.
The investment, which is the largest invstment in single-brand retail ever since the government allowed foreign direct investment in the sector was approved along with the company´s proposal for having cafeterias at its retail outlets.
IKEA´s proposal, which earlier been approved by the FIPB in part and with riders before the latest review, now needs approval from the Cabinet Committee on Economic Affairs (CCEA).
"We consider this as a very positive development. We are now awaiting for approval from the Cabinet and subsequently a notification so that we can initiate the process of establishing IKEA stores in the country," said Juvencio Maeztu, country manager of IKEA Retail India.
IKEA plans to invest about Rs. 4,200 crore to open 10 stores in the country in the first stage and the remaining Rs 6,300 crore would be used to open 15 more stores.
"The FIPB´s decision is a positive development. The government is committed to play a constructive role in encouraging FDI, specifically in areas that create jobs and provide technological advancement," Commerce and Industry Minister Anand Sharma said.
"Globally, IKEA has a business model which integrates in its embrace SMEs and domestic industry, thus making them the part of global value chain," Sharma added.