New Delhi, March 1: A proposal from Ikea, the Swedish home furnishing and decor giant, to set up a single brand retail chain in India with an investment of Rs.10,500 crore ($1.9 billion) has been forwarded to the cabinet for approval.
Based on the recommendations of the Foreign Investment Promotion Board, the proposal of Ingka Holding Overseas, holding company of Ikea, has been recommended for consideration by the Cabinet Committee on Economic Affairs, an official statement said.
The decision to forward the proposal was taken since the investment involves more than Rs.1,200 crore ($218 million), which is the upper limit for matters that can be taken up by the board on its own.
The government had last year allowed 100 percent foreign equity in single-brand retail trade, after which Ikea had sent in its proposal. But the decision was held, since the government was reluctant to allow the chain to also set up restaurants and other issus.
"These have since been resolved," a senior official had said last month following which the proposal was reconsidered by the board on Jan 21. The Swedish chain intends to open some 10-25 stores in the country over the next 10 years.