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Indian Cabinet Clears IKEA's 1.5 Billion Euro Investment Plan

India's Cabinet Committee on Economic Affairs (CCEA) cleared on Thursday a 1.5 billion euro ($1.98 billion) investment plan by IKEA, formally paving the way for the Swedish retail giant to set up shop in Asia's third-largest economy.

(Read More: Words, Not Action From India's Central Bank May Be Key)

"Yes, it is cleared," Information and Broadcasting Minister Manish Tewari said, referring to IKEA's investment proposal.

India threw open its doors to foreign retailers last year, liberalizing investment rules to allow in global supermarket chains as well as lifting an investment cap on single-brand retailers such as IKEA, as the country seeks out investments to kickstart its economy.

(Read More: Is a Key Pillar of India's Economy in Jeopardy?)

India's Foreign Investment Promotion Board (FIPB), which clears foreign investment proposals in the country, gave its approval to IKEA's investment proposal in February.

(Read More: China, India PMIs Show Factory-Sector Growth Stumbling)

But the proposal still needed a final nod from the federal government given the significant investment.

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