An initial investment of €600 million will be followed by a further injection of €900 million, the statement said, without providing a timeframe.
Ikea has no existing stores in India, which at the beginning of this year allowed foreign companies to own 100 percent of “single-brand” retail ventures, up from an earlier cap of 51 percent.
The planned investment in India was confirmed during a meeting Thursday between Ikea CEO Mikael Ohlsson and Indian Trade Minister Anand Sharma in Saint Petersburg in Russia, the government statement said.
It comes at a time when foreign corporate confidence in Asia’s third largest economy is low, due to slowing growth, new restrictive tax policies and a perception of government paralysis in enacting further reforms.
Several press reports put the investment timeframe at 15 to 20 years, with the Press Trust of India saying 10 stores would be opened in the first stage, followed by another 15 outlets.
Ikea had reportedly been worried about sourcing norms in India which require foreign retail firms to source at least 30 percent of their products from local companies.