New Delhi: After clearing three-single brand FDI proposals in one go, the Finance Ministry is likely to take up on November 20, Swedish home furnishing major IKEA's application to invest Rs 10,500 crore -- the largest so far in the segment.
After scrutiny of the application by the industry department, sources said IKEA's investment proposal to set up single-brand retail stores in India may now be taken up by the Foreign Investment Promotion Board (FIPB) in its next meeting. The Finance Ministry said the next meeting is scheduled for November 20. It, however, said "agenda for the meeting will follow".
Sources said the business interest shown by IKEA in India also came up for discussion during the meeting between visiting Swedish Minister for Enterprise Annie Lf and Indian Commerce and Industry Minister Anand Sharma.
Sharma assured the Swedish minister that IKEA would "get a green light soon" to carry out its business in India. Even after FIPB's clearance, however, IKEA's proposal will have to be finally approved by the Cabinet Committee on Economic Affairs (CCEA), as investments requests above Rs 1,200 crore require approval at the highest level. The IKEA Group, which manufactures and sells home and office furnishing products, proposes to invest in single brand retail trading in India through a 100 per cent subsidiary.
This would be the largest investment in the single-brand retailing ever since the government allowed foreign investment in this sector in January. With the government relaxing the mandatory 30 per cent sourcing clause in September, IKEA which had earlier expressed concerns over the issues, had filed its final application earlier this month.
As per 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 be used to open 15 more stores. The Scandinavian company through its retail outlets would be selling products like furnitures, blankets, kitchen utensils, bathroom fittings, electrical equipment, tableware, cooking range, toys, leather articles, cosmetics, life style items, consumer electronics and gadgets.
In its last meeting, the FIPB cleared foreign investment proposals of three single-brand retailers, including that of British footwear retailer Pavers England Ltd, to open fully-owned stores. It also approved a 51 per cent joint venture of American luxury clothing retailer Brooks Brothers and Italian jewellery maker Damiani's plan to form a joint venture with Mehta's Pvt Ltd.