Swedish furniture retailer Ikea says it will allot €1.5 billion (US$1.8 billion) for store openings in India over a 15 to 20 year period.

In a meeting with India’s commerce minister Anand Sharma, Ikea CEO Mikael Ohlsson said that the investment will be directed to openings of 25 retail stores, food mart, restaurants, nursing home and publications under its brand name.

While Ikea spokeswoman Malin Pettersson Beckeman said that the mandatory 30 per cent local sourcing clause remains as a challenge, Ikea has now decided to open stores in India under that norm.

“Having studied the guidelines, we believe we can live up to the guidelines and keep within the spirit of the policy,” Beckeman said.

Ikea would be the second foreign investor to operate under 100 per cent FDI after British footwear retailer Pavers since the Indian government has loosened up its rule on single-brand retailing.

Ikea sourced goods worth US$450 million from India last year, and is expected to rise to US$1 billion when the retailer starts its operation in the country.

Foreign retailers including H&M, Prada, Gap and Abercrombie & Fitch also expressed their desire to operate in India under 100 per cent FDI.

GB