Swedish furniture retailer IKEAs foray into the Indian markets may have to wait a bit longer as the Cabinet Committee on Economic Affairs is expected to take up the proposal towards the end of this month or early May.
The department of industrial policy and promotion (DIPP) is understood to be still examining the proposal and is yet to float a Cabinet note.
The DIPP is still perusing the proposal. Once the Cabinet note is prepared,the matter will have to be listed and placed on the CCEAs agenda. It could take another couple of weeks at least, said a senior government official.
The foreign investment and promotion board (FIPB) had cleared IKEAs Rs 10,500 crore -proposal on January 21 this year that would allow the retailer to not only set up retail stores but also open its widely popular cafes in the country and sell additional products.
The Swedish company,which is the worlds largest furniture maker,plans to invest the amount over the next 10 years in setting up 10 stores along with necessary infrastructure. Subsequently,it would open another 15 stores.
But since the FIPB can only approve investment proposals up to Rs 1,200 crore,the CCEA will have to give final go-ahead to the project.
Though proposals of over 60-odd single-brand retail chains including Pavers England and Le Creuset have been cleared since the government eased FDI rules for the sector last year,IKEA is the largest such proposal. It also comes at a time when the government is trying hard to attract foreign investors in order to revive economic growth.
Affirming the governments support to the big ticket investment,commerce minister Anand Sharma had last month said that the proposal would be taken up by the CCEA soon as it would help generate employment and also integrate Indian manufacturing with the global production value chain.