New Delhi: After clearing IKEA's Rs 10,500 crore foreign direct investment proposal, the Finance Ministry on Wednesday said it has now forwarded the investment plans of Swedish furniture major to set up single brand retail stores to the Cabinet Committee on Economic Affairs (CCEA) for final approval. "One proposal (of) M/s Ingka Holding Overseas BV, amounting to Rs 10,500 crore, has been recommended for consideration of CCEA," the Ministry said in a statement.
Ingka Holding Overseas is parent company of IKEA. The Foreign Investment Promotion Board (FIPB) in the ministry had earlier cleared the proposal on January 21.
However, since the proposed foreign investment is of more than Rs 1,200 crore, it requires clearance of CCEA, which is headed by Prime Minister Manmohan Singh. 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.
The world's largest furniture retailer plans to set up 10 furnishing and home-ware stores as well as allied infrastructure in over 10 years in India. Subsequently, it plans to open 15 more stores.
IKEA's would be the largest investment in the single-brand retailing ever since the government has allowed foreign investment in this sector. IKEA has been sourcing many products from India for the past 25 years.
With the government relaxing the mandatory 30 per cent sourcing clause in September, IKEA, which had earlier expressed concerns over the issues, had put in its final application.