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

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

Coal Reforms

Coal Reforms

Factbox - India pushes ahead with coal reforms  Full Article 

Apple Result

Apple Result

Apple's iPhone sales beat Street but iPad volumes slide  Full Article 

Airport Accident

Airport Accident

Total CEO de Margerie killed in Moscow plane accident - airport spokeswoman.  Full Article 

Nadella's Paycheck

Nadella's Paycheck

New Microsoft CEO Nadella's pay tops $80 mln with big stock awards.  Full Article 

Deregulation Impact

Deregulation Impact

Private fuel retailers to dip toe, not dive back, into India  Full Article 

JLR China

JLR China

JLR sees 20 percent growth in China sales this year - exec  Full Article 

An RBI First

An RBI First

RBI releases minutes of financial stability council's Aug meet  Full Article 

IBM Earnings

IBM Earnings

IBM ditches 2015 operating EPS target, shares slump 7 pct  Full Article 

Reuters India Mobile

Reuters India Mobile

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