The Indian government formally agreed Tuesday to allow foreign companies to own 100 percent of stores here dedicated to selling products under a single brand name.
The decision was part of a package of investment reforms announced in November to bring more foreign investment into Indian retailing and strengthen India's creaky food distribution system.
Furious opposition from small shopowners and political allies pushed the government to backtrack on the part of the plan that would allow foreign companies, such as Wal-Mart, to own 51 percent of supermarket chains.
However, the Commerce Ministry formally announced Tuesday it had gone ahead with the plan to allow foreign companies that sell products under a single-brand name, such as IKEA, to own 100 percent of their stores here.
Under the new regulations, those companies would have to source at least 30 percent of their products from small Indian industries and artisans, a move intended to stimulate local production, according to a government statement.
Sweden-based IKEA has been keen to set up shop in India for years. It said last month that it was taking more time to decide its expansion plans.