The Cabinet Committee on Economic Affairs on Thursday approved IKEA's proposal to invest Rs10,500 crore, the biggest ever FDI proposal in single brand retail for setting up home furnishing stores in the country.
"Whatever proposal of IKEA was there, has been cleared," Information and Broadcasting Minister Manish Tewari told reporters after the application was cleared by the Cabinet Committee on Economic Affairs headed by Prime Minister Manmohan Singh.
IKEA has proposed setting up 10 furnishing and homeware stores as well as allied infrastructure in over 10 years in India by investing about Rs10,500 crore. Subsequently, it plans to open 15 more stores.
The global furniture major has also been allowed to run cafes and restaurants within its single brand stores in India, but it cannot sell packed food items.
IKEA can sell food and beverages at its restaurants/cafes located within its stores.
The IKEA proposal was earlier cleared by the Foreign Investment Promotion Board (FIPB), but since the proposed investment was more than Rs1,200 crore, CCEA approval was needed.As of now, IKEA's will be the largest investor in the single-brand retailing ever since the government allowed foreign investment in this sector.