FIPB forwards Rs 10,500-cr Ikea proposal to CCEA

Written by fe Bureau | New Delhi | Updated: Feb 28 2013, 10:20am hrs
The Foreign Investment Promotion Board (FIPB) has recommended the R10,500-crore investment proposal of Swedish retail giant Ikea to the Cabinet Committee on Economic Affairs (CCEA) for approval.

One proposal viz Ingka Holding Overseas BV, amounting to R10,500 crore, has been recommended for the consideration of CCEA, said an FIPB statement.

The proposal has already been scrutinised by the department of industrial policy and promotion (DIPP) and will now have to be cleared by the CCEA as all approvals by the FIPB beyond R1,200 crore need to be.

Ikea plans to invest R4,200 crore in the first stage and R6,300 crore in the second in 25 retail stores in the country. It is the largest investment so far in single-brand foreign direct investment (FDI)

The company plans to trade in India through a wholly owned subsidiary, besides raising the existing sourcing for global operations from India significantly.

The FIPB in November last year cleared the Swedish firm's proposal to invest in single brand retail in India through its wholly-owned subsidiary Ingka Holding Overseas BV.

Ikea had later sought a review of the decision that was taken by the FIPB in December, wherein the board had struck off 18 product categories of the 30 proposed and refused the company to open its signature cafe and restaurant in the stores it plans to open.

The board did not allow the company to sell items such as home and office-use products, textiles, apparel and fabric, electronic items, leather products, toys, books, and lifestyle and travel-related items.