Ikea has abandoned $1bn (£611.2m) investment plans for India due to the red tape that still exists for foreign retail entrants.

The furniture giant had been considering launching in India but wanted to do so with full ownership, which the law does not allow foreign retailers to do.

After the election of a new government last month it was hoped legislation would be changed to encourage more overseas investment, but there has been no change so far. An Ikea spokeswoman said the retailer would look again at India’s potential if the rules are changed.