Official: IKEA to invest Rs10,500cr

To open stores by 2014-15.

Swedish furniture giant IKEA can finally heave a sigh of relief as the Cabinet Committee on External Affairs has cleared its investment plan of Rs 10, 500 in India. The $25 billion company’s investment in India has been the largest in the country ever since the government has allowed 100 percent FDI in single brand retail. IKEA’s quest to set up store in India began in June 2012 when it applied to the FIPB with its investment plan. IKEA currently sources $500 million worth of goods from India to export to other countries. In light of this, the requirement to source 30 percent of all its goods sold in India from within the country, preferably from MSMEs is something that IKEA has been resisting. The company wants to establish 10 stores over the next 10 years and around 25 over a longer period. Each of these is likely to be spread over 100,000 sq ft. In addition to selling furniture, IKEA has secured approval to operate cafes and restaurants in its stores.

FDI has recently brought to India, brands and retailers including Decathlon, Rusta, Promod and Le Creuset to India while multi brand retailers like Prowl Germany has submitted their proposals to FIPB. It is asserted that international players will start setting up operations by 2014-15 in India through FDI.