NEW DELHI (REUTERS) - India's Cabinet Committee on Economic Affairs cleared on Thursday a 1.5 billion-euro (S$2.4 billion) investment plan by Ikea, formally paving the way for the Swedish retail giant to set up shop in Asia's third-largest economy.

"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, liberalising 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.

India's Foreign Investment Promotion Board, which clears foreign investment proposals in the country, gave its approval to Ikea's investment proposal in February. But the proposal still needed a final nod from the federal government given the significant investment.