Swedish clothing giant Hennes & Mauritz AB (H&M) has got the approval of the Foreign Investment Promotion Board (FIPB) to invest about Rs 720 crore for opening stores across the country.
H&M, one of the world's largest fashion companies, has 3,000 stores spread across 53 markets worldwide. It had made an application to enter the Indian market in April in the single brand retail category.
"The H&M's proposal has been cleared," said a Finance Ministry official after the meeting of FIPB.
This is the second Swedish firm after IKEA to get the nod to set up stores in India recently.
The government has further liberalised FDI norms in the retail sector, allowing 100 per cent FDI in single-brand retail. India has cleared 60-70 proposals of single brand retail since 2006 when the segment was opened to foreign investments.
Earlier this year, the government had cleared furniture-maker IKEA's Rs 10,500-crore proposal to set up operations in the country.
Sources said FIPB, headed by Economic Affairs Secretary Arvind Mayaram, cleared 14 proposals in all at Wednesday's meeting. There were 23 items on the agenda.
Decision on Veriant Systems's foreign investment proposal has been deferred as comment of the Ministry of Defence was awaited.
Besides, Vodafone's proposal to acquire 100 per cent stake in its Indian arm was not take up in the meeting as all the ministries and departments concerned did not give their comments.