New Delhi: The government on Thursday allowed Swedish furniture major IKEA to invest Rs 10,500 crore - the biggest ever FDI proposal in single brand retail - for setting up home furnishing stores in the country.
"Whatever proposal of IKEA was there has been cleared," Information and Broadcasting Minister Manish Tewari told reporters after the application was cleared by the Cabinet Committee on Economic Affairs headed by Prime Minister Manmohan Singh.
Terming the decision as a "historic one", Commerce and Industry Minister Anand Sharma said that it is the biggest foreign investment in the retail segment till now and will provide an opportunity to Indian small and medium enterprises for integrating into global value chain.
"It will also provide a diverse choice for Indian consumers for a wide range of products. This decision has once again re-affirmed the commitment of the government for maintaining a liberal economic agenda," he said.
"We feel very welcome in India. This is a big step in our journey to open IKEA stores in India. We feel very confident that the people of India will love to visit and to shop at IKEA," IKEA India Chief Executive Officer Juvencio Maeztu said in a statement.
The Swedish furniture major has proposed setting up 10 furnishing and home-ware stores as well as allied infrastructure in over 10 years in India by investing about Rs 10,500 crore. Subsequently, it plans to open 15 more stores. The company has been sourcing many products from India for the past 25 years.
IKEA has also been allowed to run cafes and restaurants within its single brand stores in India, but it cannot sell packed food items. It can sell food and beverages at its restaurants/cafes located within its stores.
The IKEA proposal was earlier cleared by the Foreign Investment Promotion Board. Since the proposed investment was more than Rs 1,200 crore, CCEA approval was needed.
As of now, IKEA's will be the largest investor in the single-brand retailing ever since the government allowed foreign investment in this sector.