Finance Ministry to decide on IKEA's FDI proposal today
Posted on: 03:56 AM IST Nov 20, 2012
New Delhi: The Finance Ministry is likely to take a decision on Tuesday on Swedish furniture major IKEA's Rs 10,500-crore investment plan, the largest FDI proposal in single-brand retail so far. IKEA's proposal to set up 25 stores in India is listed on the agenda of Foreign Investment Promotion Board (FIPB), which will meet on Tuesday to consider 27 FDI proposals.
The proposal has already been scrutinised by the Department of Industrial Policy and Promotion (DIPP) in the Commerce and Industry Ministry. After FIPB's nod, it will have to be cleared by the Cabinet Committee on Economic Affairs (CCEA) as the board can clear investment applications worth up to Rs 1,200 crore only.
The FIPB in its last meeting had cleared three single brand FDI proposals. They were of British footwear retailer Pavers England to open fully-owned stores, a 51 per cent joint venture of American luxury clothing retailer Brooks Brothers and Italian jewellery maker Damiani's plan to form a venture with Mehta's Pvt Ltd.
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 has 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 filled its final application earlier this month. The other items on the agenda of the meeting include proposals of Bharat Electronics Ltd, Multi Commodity Exchange of India Pvt Ltd, Mahindra and Mahindra Ltd, OCS Group Singapore Pte Ltd, Singapore; and InterCall Asia Pacific Holdings Pvt Ltd, Singapore.