Tesco moves into India with cash-and-carry launch

by Staff, Brand Republic 12-Aug-08, 14:30

LONDON - Tesco is to move into the Indian market with a £60m investment to develop a wholesale cash-and-carry business.

The Mumbai-based business will sell fresh food, groceries and non-food products to small retailers, restaurants, "kirana" stores, which is the Indian equivalent of a cornershop, and other business owners.

However, Tesco will not be able to open its own chain of supermarkets in the country because of Indian legislation regarding foreign investment.

At the same time, Tesco has signed an agreement with Trent, the retail arm of Indian conglomerate the Tata Group. This will see Tesco paid by Trent to help it expand its Star Bazaar hypermarket business from the present four stores to 50 over the next four years. Tesco will also supply merchandise to Star Bazaar.

Sir Terry Leahy, CEO of Tesco, said: "It complements our entries into China and the United States, giving us access to another of the most important economies in the world. Our wholesale cash-and-carry format will bring improved value, range and service to thousands of Indian businesses."

Tesco has been expanding internationally, but as with its UK operations, it is not always without controversy. In April, a group of UK authors including Nick Hornby wrote a letter objecting to Tesco's treatment of a Thai journalist who had criticised the firm's expansion in the country.

Tesco has since said it will abandon plans to sue him for libel if he apologises for his comments.