New Delhi: The Foreign Investment Promotion Board on Monday approved UK-based Tesco Plc’s proposal to enter the Indian multi-brand retail segment in joint venture with Tata Group company with an initial investment of $110 million (about Rs 680 crore).
Tesco proposal entailing investment of $110 million has been cleared, sources said after the FIPB meeting held here.
After the approval, Tesco will pick up a 50 per cent stake in Trent Hypermarket Ltd, a wholly-owned subsidiary of Trent Ltd, a Tata group company. Tesco is the first global retailer to apply for multi- brand retailing after the government allowed 51 per cent FDI in the segment in September last year.
Trent Hypermarket runs 16 outlets in the southern and western regions with support from Tesco. The UK retailer plans to sell 14 categories of products, official sources said.
The items to be sold at its stores include tea, coffee, vegetables, fruits, meat, fish, dairy products, wine, liquor, textiles, footwear, furniture, electronics and jewellery.
The FIPB, headed by economic affairs secr-etary Arvind Mayaram, considered 12 items including Tesco’s FDI proposal. India allows FDI in most of the sectors through automatic route, government approval is required in certain sectors sensitive for the economy.
Reacting to the FIPB nod to the $110-million proposal in the Indian multi-brand retail segment that will allow Tesco to work on practicalities of setting up a joint venture with Tata group firm Trent, UK-based Tesco said:“Tesco is pleased that the FIPB has agreed to our proposal. This will now allow us to work on the practicalities of setting up the joint venture with Trent. Any such announcement will be made in the usual way."
