The proposal of the Swedish furniture major IKEA to invest Rs 10,500 crore will have to be approved by the Cabinet Committee on Economic Affairs (CCEA) as FIPB can clear proposals worth up to Rs 1,200 crore only.
Yesterday, IKEA has approached the government with a proposal to invest 1.5 billion euros (Rs 10,500 crore) to set up 25 stores in the country.
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 and comes at a time when FDI inflows have declined by 41% in April.
The company has filled an application with the government through its adviser Titus and Co Advocates.
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 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.
Besides, it also proposes to set up restaurants, food mart, nursing home and publications under its brand name.
This is the second proposal made to the government after the government hiked the FDI cap in single brand retail to 100 per cent from 51 per cent.
Earlier the footwear and accessories player Pavers England has applied for a licence to operate on its own in India, envisaging an investment of Rs 100 crore.
