IKEA Plans Entry into India

Swedish homeware company Ikea has announced its plans to invest Euro 1.5 billion in India for setting up 25 retail stores as wholly-owned subsidiaries following months of clarificatory discussion with the government on the compulsory clause of domestic sourcing of inputs from local small companies.
A formal proposal was submitted to the foreign investment promotion board or FIPB on Friday requesting it to grant approval to Ikea India to hold 100% FDI in 25 stores across the country. The proposed investment in the stores would be to the tune of Euro 600 million in the first stage and Euro 900 million in the second stage.

 Source : Economic Times

Retail Penetration in 2011

Organised retail in India is still in its nascent stage and hence offers immense potential. India currently has a small 6% penetration in organised retail , while a country like the US has a high  85% penetration. Given that there is a double digit economic growth projection for  India in the following decade, the future has immense potential for the growth of organised retail in India. 

The chart below shows  retail penetration across some countries.

Source : E&Y Report, Aranca Research