Centre clears Ikea’s 10K-cr FDI `

New Delhi, May 2: The government today formally allowed Swedish furniture major Ikea to invest `10,500 crore for setting up single brand retail stores to sell mostly home furnishing items. “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 (CCEA) headed by Prime Minister Manmohan Singh.

“This will be the biggest foreign investment in the retail segment till now and will provide an opportunity to Indian small and medium enterprises in a wide range of labour intensive sectors for integrating into the global value chain. On the other hand, it will also provide a diverse choice for Indian consumers for a wide range of products,” commerce minister Anand Sharma said.

Ikea has proposed setting up 10 furnishing and homeware stores as well as allied infrastructure in over 10 years in India by investing about `10,500 crore. Subsequently, it plans to open 15 more stores.

The global furniture major has also been allowed to run cafes and restaurants within its sin- gle brand stores in India, but it cannot sell packed food items. Ikea 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, but since the proposed investment was more than `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. — PTI