LONDON: Britain’s Tesco is talking to potential partners in India, including Tata Sons, to tap the country’s over $300 billion (Rs13,28,401 crore) retail market, as it finds the promise of profit reason enough to ignore political opposition to foreign retailers.
Tesco is pressing ahead with plans to form a joint venture in India following the breakdown of talks with Bharti, which is pursuing a tie-up with America’s Wal-Mart.
“We are interested in India and are researching the market,” a Tesco spokesman said on 24 February. Tesco is understood to be holding discussions with a number of Indian groups and it was not clear at what stage its conversations with Tata had reached.
Tata Sons is part of the Tata Group, the Indian conglomerate headed by Ratan Tata who recently pulled off India’s largest foreign deal with 6.7 billion pounds acquisition of Anglo-Dutch steel group Corus.
The Indian business house has a presence in the retail market and runs lifestyle and speciality apparel stores under brands such as Landmark and Westside respectively.
Indian rules prohibit foreign multi-brand retailers from investing in the market, but they can invest in cash-and-carry (wholesale) and back-end linkages. A 51% foreign direct investment is also allowed in single brand retail.
Though Wal-Mart is looking to tie-up for back-end operations with Bharti, the ruling political party United Progressive Alliance’s Chairperson Sonia Gandhi had written to the government advising caution in allowing the US retailer entry into India.