Tesco supermarket chain confirmed its partnership with Tata Group to invest in the retailer sector in India. (Photo: Stock File)
Tesco makes investment deal in India
UNITED KINGDOM
Friday, April 04, 2014, 01:40 (GMT + 9)
British supermarket giant Tesco has settled a deal with India's Tata Group to invest in a dozen stores in the south and west of the country.
As part of the joint venture with Trent Hypermarket Limited (THL), a unit of India's Tata Group which runs the country's Star Bazaar chain, Tesco announced it will invest GBP 85 million (USD 141.3 million) in 12 existing Star Bazaar stores selling food and groceries alongside homewares, kitchen products and fashion items, The Telegraph newspaper announced.
Tesco won’t be the first British retailer in India, since Marks & Spencer opened its first store in the country in 2001 and operates a joint venture with local player Reliance Retail. The own-label retailer has 36 stores there and plans to run 100 stores by 2016.
Tesco sources remarked that it sources more than GBP 300 million (USD 499 million) worth of products from Indian suppliers every year, some of which make their way into UK stores. However, it was stressed that the Star Bazaar supermarkets would remain geared to the local Indian market rather than selling British familiar favourites for expats.
Currently, Tesco’s presence in India is limited to an operation centre that acts as the global services arm for the supermarket giant worldwide, operating in 12 countries.
In India rules were eased in August 2013 amid fears the rule was blocking investment, stipulating that foreign supermarkets had to source 30 per cent of their products from local firms but now foreign firms have five years to hit the target, allowing them to import goods from overseas initially.
At present, single-brand retailers are allowed full ownership of stores in India, and previously unavailable cosmetic brands as Body Shop and Clinique, food outlets like McDonald’s and Domino’s and fashion giants Mango and Zara have all opened stores.
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