Sweden’s IKEA, the worlds largest furniture maker, plans to invest invest Rs 10,500 crore for setting up of 25 stores in single-brand retail in the country. IKEA already has a strong presence across the globe with their stores in more than 38 countries. Of these 287 stores in 26 countries belong to the IKEA Group.
The IKEA Group, which sells ready to assemble, pre fabricated office and home furniture, proposes to invest 1.5 billion euros (Rs 10,500 crore) through a 100 per cent subsidiary in single brand retail trading in India. This would be the largest investment in the single-brand retailing ever since the government has allowed foreign investment in this sector. According to 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. (Source : PTI)
In Jan 2012, The government had allowed 100% FDI in single-brand retail, paving the way for global chains in life style , luxury retail, other global brands to have full ownership of their India operations. Earlier there was a cap on foreign equity to the extent of 51 % and all these brands had to look for an Indian partner to support their brand in India. (Read: 100 % FDI in single brand retail ..) . Under the FDI norms, IKEA will be required to source 30 per cent of their requirement from Indian SMEs.
