IKEA to invest $1.2bn in India

India's commerce ministry says Swedish retailer IKEA has applied to invest a total of Euro 1.5 billion ($1.2 billion) to open 25 stores in the country.

The ministry said in a statement Friday that IKEA plans to initially invest Euro 600 million, followed by an additional Euro 900 million to create a wholly owned subsidiary in India.

The IKEA logo is seen outside the Wembley branch of the Swedish international furniture and home accessories company in west London. File picture: Toby Melville. Credit: REUTERS

India recently changed its investment rules for foreign retailers, to allow single brand companies like IKEA to open wholly owned subsidiaries. The government failed to push through a more controversial measure that would allow supermarkets like Wal-Mart to open stores here.

IKEA chief executive Mikael Ohlsson and India's commerce minister Anand Sharma met in St. Petersburg, Russia on Friday and finalised the deal. - Sapa-AP