In one of the biggest Foreign Direct Investment (FDI) initiatives, Swedish home furnishing major IKEA has proposed a whopping Rs. 10,500 crore (€1.5 billion) investment to set up 25 stores under the single brand retail category.
In a statement issued in New Delhi, the Commerce and Industry Ministry said the IKEA Group, which manufactures and sells home and office furnishing products, proposes to invest in single brand retail trading in India through a 100 per cent subsidiary. This would be the largest investment in the single-brand retailing ever since the government has allowed FDI in this sector in Jaunary this year.
Officials in the Ministry said the company has filed an application with the government through its adviser Titus and Co. Advocates. The proposal needs to be finally be approved by the Cabinet Committee on Economic Affairs (CCEA), as the proposal exceeds Rs. 1,200 crore. As per the proposal, IKEA would be investing Rs. 4,200 crore (€600 million) to open 10 stores in the first stage. The remaining Rs. 6,300 crore (€900 millilon) would used to open 15 more stores. The company would be selling products like furnitures, blankets, kitchen utensils, bathroom fittings, electrical equipment, tableware, cooking range, toys, leather articles, cosmetics, life style items, consumer electronics and gadgets.
The company has also proposed to set up restaurants, food mart, nursing home and publications under its brand name. This is the second proposal made to the government after the government hiked the FDI cap in single brand retail to 100 per cent from 51 per cent. Earlier the footwear and accessories player Pavers England has applied for a licence to operate on its own in India, envisaging an investment of Rs. 100 crore.
