New DelhI: The Cabinet Committee on Economic Affairs (CCEA) cleared on Thursday a €1.5 billion (around 10,600 crore) investment plan by Ikea, formally paving the way for the Swedish retail giant to set up shop in Asia’s third largest economy.

“Yes, it is cleared," information and broadcasting minister Manish Tewari said, referring to Ikea’s investment proposal.

India threw open its doors to foreign retailers last year, liberalizing investment rules to allow in global supermarket chains as well as lifting an investment cap on single-brand retailers such as Ikea, as the country seeks out investments to kickstart its economy.

India’s Foreign Investment Promotion Board (FIPB), which clears foreign investment proposals in the country, gave its approval to Ikea’s investment proposal in February. But the proposal still needed a final nod from the government given the significant investment.

“We feel very welcome in India. This is a big step in our journey to open Ikea stores in India. We feel very confident that the people of India will love to visit and to shop at Ikea and by offering good quality home furnishing products and solutions at affordable prices, we can bring a difference to a better life at home in the many years to come.", said Juvencio Maeztu, chief executive, Ikea India.

“Today’s decision of CCEA to allow the foreign investment proposal of Ikea is indeed a historic one. This will be the biggest foreign investment in the retail segment till now and has once again re-affirmed the commitment of the government for maintaining a liberal economic agenda," commerce minister Anand Sharma said in a statement.

In its original application, Ikea had proposed to set up 10 furnishing and homeware stores as well as allied infrastructure over 10 years in India. Subsequently, it plans to open 15 more stores.

The CCEA also cleared the setting up of a Central Public Sector Enterprises (CPSE) Exchange-Traded Fund (ETF), which would comprise CPSE stocks (from amongst the listed-CPSE stocks).

Each stock would have a fixed weightage in the basket.

However, the composition of the basket, the launch of the new fund offer (NFO), the discount to be provided and other issues relating to contribution and pricing of the ETF will be decided by an empowered group of ministers (EGoM).

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