Anand Sharma assures quick approval for Tesco-Tata JV

Finally there is at least one taker for the UPA’s much-debated FDI policy formulti-brand retail and Commerce Minister Anand Sharma, who has been trying his level best to woo global majors to the country, is exuberant.

Tesco of the UK, the world’s third largest retailer, yesterday said it has sought the government’s approval to buy a 50 percent stake in Tata group’s retail chain Trent Hypermarket Ltd. The proposal, submitted to the Department of Industrial Policy and Promotion, is to set up a 50:50 joint venture with Trent, which runs Star Bazaar. Tesco is the first foreign applicant since the government began allowing 51 percent FDI in multi-brand retail last year.

Commerce Minister Anand Sharma said, “We welcome this development and on our part assure them all support for expedited clearances. I am sure that the other global leaders will also look at investing in India.”

[caption id=“attachment_1198711” align=“alignleft” width=“380”] Anand Sharma. Reuters[/caption]

The government looks at the venture as a harbinger of the potential transformation the Indian retail sector could undergo.

Tesco plans to invest USD 110 million in India and aims to open three to five stores every year. The stores will be initially opened in Maharashtra and Karnataka.

Both companies have filed their applications with the Department of Industrial Policy and Promotion that will then forward it to the Foreign Investment Promotion Board (FIPB) for approval.

Trent vice-chairman Noel Tata said the application was a good step in the Tesco-Tata relation, adding,“We believe that our understanding of the Indian market coupled with Tesco’s unparalleled global retail expertise will allow us to leverage the tremendous potential of the market to the benefit of all stakeholders.”

Tesco sources told CNBC-TV18 that they see tremendous potential in the Indian market and have developed good relations with local farmers and suppliers.

With inputs from agencies