The approval from Foreign Investment Promotion Board (FIPB), the nodal agency for approving FDI proposals, to IKEA’s proposal of opening single-brand retail stores in India will attract an investment of about Rs 10,000 crore (US$ 1.86 billion) over the next 15-20 years. The Swedish furniture manufacturer proposes to invest in single-brand retail trading in India through a 100 per cent subsidiary and is already the world's largest home furnishing player operating 336 stores in 44 countries. The proposal is now placed before the Cabinet Committee on Economic Affairs (CCEA) for final approval.
The FIPB approval is a clear testimony to the government’s commitment to both engage concretely and substantively develop the FDI regime integrating it with the economic priorities that India has set for itself, viz, in this case an impetus to infrastructure development, job creation and boost to the SME sector. The statement from Mr Anand Sharma, Minister of Commerce, Industry and Textiles, Government of India that globally, IKEA has a business model which integrates in its embrace SMEs and domestic industry, thus making them the part of global value chain, only assures about the focus of the government to create an inclusive growth model for the country. The announcement coming on the eve of the Annual Meeting of World Economic Forum to be held from January 23-27, 2013 in Davos, Switzerland, is unlikely to go unnoticed and also set the pace for more to come.
This is the largest investment in single brand retail in India ever since the government allowed foreign investment in this sector. In fact, it is just another testimony to the fact that India is indeed a Land of limitless opportunities and India beckons the world – our nation brand campaign at Davos 2013.