Ikea applies to open stores in India Ikea, the Swedish home furnishing retailer, has applied to the Indian government to set up its stores in the country, taking advantage of New Delhi's recent moves to open retail businesses to foreign ownership. The application by Ikea is the culmination of years of negotiating with New Delhi to set up shop in India, which has seen a construction boom in recent years and has a huge pent-up demand for affordable home furnishings. "We know that many people are eagerly waiting for the first Ikea store to open in India," said Mikael Ohlsson, president and chief executive. Once our application is approved, we will develop a solid plan for the establishment of Ikea stores for many years to come. Ikea announced last month that it plans to double the pace of its store openings globally to 20-25 stores a year, focusing especially on emerging markets such as China and India. The company indicated earlier this year it could invest up to $757m in the first stage of its plan in India, and that its total investment in India over the next decade or two could eventually reach $1.9bn. However, dealing with Indian policymakers to reach this point has proved a long and frustrating process for the Swedish retailer. Although India has allowed 51 per cent foreign ownership in "single-brand retail" since 2006, Ikea was unwilling to set up through a joint venture and wanted full ownership of its retail operations. Ikea lobbied hard for two years for New Delhi to raise the foreign equity limit to allow full foreign ownership of single-brand retailers and after intensive negotiations, the company believed it was on the verge of a breakthrough in 2008, when the government quietly pledged to raise the limit. But in the absence of any policy change, the Swedish company announced in 2009 that it was abandoning its efforts to invest in India. India finally decided it would allow 100 per cent foreign ownership of single-brand retail stores last year but it then proceeded to impose onerous conditions that Ikea said would be unfeasible. In particular, New Delhi's initial policy said that 30 per cent of all products sold by foreign retailers would have to be sourced from India's small and medium enterprises. Ikea argued that, given the scale of its ambitions, its Indian suppliers could expect to grow well beyond the $1m capital investment cap that defines small enterprises. After more intensive negotiations, New Delhi finally agreed last month to relax the sourcing condition, which will now require single-brand retailers to source 30 per cent of their products locally, "preferably" from small and medium enterprises. In his statement, Mr Ohlsson said he believed the current policy guidelines "support the business needs of many single-brand retailers, and will benefit consumers, as well as the development of suppliers and many producers in India."