MUMBAI: Britain’s Tesco said yesterday it has applied to open supermarkets in India, becoming the first retail giant to try to enter the market since New Delhi removed foreign investment barriers last year.
The world’s third largest retailer has applied to India’s Foreign Investment Promotion Board for permission for an initial $110m investment in the Tata Group’s retail business Trent Hypermarket Limited.
“Today, we’re making an application to develop a multi-brand retail business in India,” said Trevor Masters, chief executive officer for Tesco’s Asia operations, on the company’s website.
“If it were successful, it could open the way to Tesco investing directly and forming a partnership from our existing relationship with the Tata Group,” Masters said.
The Indian government moved last August to open up its potentially lucrative retail sector to foreign companies to try to boost a sharply slowing economy.
But until now no companies had applied amid concern about some of the tough conditions for entry.
Commerce Minister Anand Sharma welcomed Tesco’s move, which initially proposes establishing stores in the western state of Maharashtra and the southern state of Karnataka, and opening three to five stores every financial year.
“We welcome this development and on our part assure them all support for expedited clearances,” Sharma said in a statement.
“We hope that this will mark a new beginning in transforming India’s retail industry. I am sure that the other global leaders will also look at investing in India.”
P Phani Sekhar, an analyst with Mumbai’s Angel Broking, said the move would come as a relief to the government more than one year after it opened the sector.
AFP
