Sweden-based furniture retailer IKEA has approached the Finance Ministry with a proposal to invest Rs 10,500 crore for setting up of 25 stores in single-brand retail in the country.
The IKEA Group, which sells office and home furniture, proposes to invest 1.5 billion euros (Rs 10,500 crore) through a 100% subsidiary in single brand retail trading in India, sources said.
This would be the largest investment in the single-brand retailing ever since the government has allowed foreign investment in this sector.
The company has filled an application with the Foreign Investment Promotion Board (FIPB) through its adviser Titus and Co Advocates.
According to the proposal, IKEA would be investing 600 million euros (Rs 4,200 crore) to open 10 stores in the first stage. The remaining 900 million euros (Rs 6,300 crore) would used to open 15 more stores.
In January, the government has notified 100% foreign direct investment (FDI) in single-brand retail, paving way for global chains like Adidas, Louis Vuitton and Gucci to have full ownership of their India operations.
Meanwhile, IKEA CEO and President M Ohlsson today met Commerce and Industry Minister Anand Sharma in St Petersburg and discussed about the investment plans in India.
The Scandinavian firm, which is already purchasing products from India and under the current FDI norms, will be required to source 30% of their requirement from Indian SMEs.