India Approves IKEA’s Investment in Single-Brand Retail
Nov. 22 – India’s Foreign Investment Promotion Board (FIPB) approved IKEA’s US$1.9 billion investment plan on Tuesday in the largest ever instance of foreign direct investment into the country’s single-brand retail sector.
“FIPB has approved the proposal of IKEA,” Arvind Mayaram, the county’s Economic Affairs Secretary told reporters after the meeting to consider FDI proposals on Tuesday.
The FIPB approval came only two months after the government relaxed the mandatory 30 percent local sourcing clause, and allowed 100 percent FDI in single-brand retail and 51 percent in multi-brand retail.
IKEA, the world’s largest furniture retailer, proposed to invest INR10,500 crore (US$1.9 billion) in India through a 100 percent owned subsidiary and open 25 retail stores across the country. The proposal now waits to be cleared by the Cabinet Committee on Economic Affairs as any proposal over INR1,200 crore has to be approved by the Cabinet panel.
Earlier, the FIPB had also approved three proposals in the single-brand retail sector, including British footwear retailer Pavers England’s plan to open fully-owned stores, U.S. clothing Brooks Brothers’ proposal for a 51 percent joint venture and Italian jewelry manufacturer Damiani’s plan to start a joint venture.
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