Supermarket giant Tesco is planning to branch out into the Indian market, as it continues to expand outside the UK under chief executive Sir Terry Leahy. Its foray into the market will follow the footsteps of Wal-Mart, owner of Asda in the UK, which opened superstores in India last year.
Tesco says that it initially plans to invest £60m to open a wholesale cash-and-carry in Mumbai. It has also signed a deal to help the retail arm of India’s Tata group to develop its hypermarket business.
The business in India will complement Tesco’s existing businesses in China and the US.
Wal-Mart signed a deal with Bharti Enterprises, an Indian mobile operator in 2006, to start opening hundreds of Wal-Mart branded superstores across India over a course of five years, beginning in 2007.
At the time the deal was signed the partnership appeared odd to some observers, with Bharti having had no experience in either grocery or discount stores.
In the past the Indian retail industry has remained largely closed to foreign investment out of domestic fears that Western retailers would spell the end of local shops and businesses.