CCEA may take up Ikea next week

FIPB reccommended proposal to CCEA as the board can clear foreign investment proposals worth up to Rs 1,200 crore

The Cabinet Committee on Economic Affairs (CCEA) is likely to take up Swedish home furnishings retailer Ikea's Rs 10,500 crore investment proposal next week.

"Ikea proposal will come in CCEA by the middle of next week," a senior official said.

Earlier, the Foreign Investment Promotion Board (FIPB) recommended the proposal to CCEA. This was because FIPB can clear foreign investment proposals worth up to Rs 1,200 crore.

Last year, Ikea was given permission to invest only Rs 4,200 crore. However, following only a part approval to its investment plans, the company took up the issue with industry department.

CCEA will take up the total proposal of Rs 10,500 crore of the Swedish company, including stores and cafeterias.

Ikea had proposed to invest the amount for setting up 10 furnishing and homeware stores as well as allied infrastructure over 10 years in India. Subsequently, it plans to open 15 more stores.

Ikea's would be the largest investment in the single-brand retailing ever since the government has allowed foreign investment in this sector.

The government had earlier removed FDI cap in single brand retail from then 51%. However, foreign investors were still not forthcoming because of sourcing norms. Later in September last year, the government diluted those norms as well. End