IKEA's 100 billion rupee investment proposal cleared

NEW DELHI/MUMBAI Mon Jan 21, 2013 9:57pm IST

1 of 2. The Ikea sign is seen outside the Wembley branch of the Swedish international furniture and home accessories company in west London October 15, 2010.

Credit: Reuters/Toby Melville/Files

Related Topics

Priyanka Gandhi Vadra, daughter of Congress party chief Sonia Gandhi, adjusts her flower garlands as she campaigns for her mother during an election meeting at Rae Bareli in Uttar Pradesh April 22, 2014. REUTERS/Pawan Kumar

Election 2014

More than 814 million people — a number larger than the population of Europe — are eligible to vote in the world’s biggest democratic exercise.  Full Coverage 

NEW DELHI/MUMBAI (Reuters) - India's foreign investment board cleared IKEA's proposal to set up stores in the country, Trade Minister Anand Sharma said, paving the way for it to invest $1.86 billion there over 15-20 years.

The finance ministry had previously ruled that the Swedish retailer, known for selling flatpack furniture and accessories, would not be allowed to sell items other than furniture such as food, textile products and office supplies, as it does in other markets.

However, the company resubmitted its investment proposal requesting permission to bring in its global business model and a government source with direct knowledge of the matter told Reuters on Monday that the company's investment plan had been approved in its entirety.

"The government is committed to play a constructive role in encouraging FDI (Foreign Direct Investment) specially in areas which create jobs and provide technological advancement," the Trade Minister's statement said.

IKEA's investment plan will now be sent to the Cabinet Committee on Economic Affairs (CCEA) for final approval.

"We do not have any formal response from the government on the approval and the application is still under process ... We are positive the Indian government will give us final approval," said IKEA spokeswoman Josefin Thorell.

The government has presented IKEA's entry into India's retail market as a sign that foreign investors have kept faith with Asia's third-largest economy, at a time when GDP growth in the country has declined.

IKEA plans to cash in on India's growing urban middle class and strong demand for international brands and lifestyle products such as furniture.

($1 = 53.8150 rupees)

(Reporting by Rajesh Kumar Singh in New Delhi and Nandita Bose in Mumbai; Editing by Tony Munroe and Helen Massy-Beresford)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Election 2014

Election 2014

Kashmiris wary as Modi challenges for power.  Full Article 

Facebook's Performance

Facebook's Performance

Facebook Q1 revenue grows 72 percent on rising mobile ads.  Full Article 

Earnings Season

Earnings Season

Bharti Infratel Q4 net profit jumps 64 percent.  Full Article 

Monsoon Forecast

Monsoon Forecast

South Asia monsoon seen below-average to average in 2014 - WMO.  Full Article 

Solar Dispute

Solar Dispute

Green groups urge U.S. to drop solar trade case against India.  Full Article 

Oil Imports

Oil Imports

India to make May-July oil payments to Iran - sources.  Full Article 

Rice Exports

Rice Exports

India may cede top rice exporter spot under Southeast Asian price onslaught.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage