Tesco Sets Sights on India...

Tesco Plc (NASDAQ: TESO), the UK's largest retailer, said it is to enter the Indian market by developing a wholesale cash-and-carry business, with an initial investment of up to 60 million pounds in the first two years.

It said the new wholesale outlets, designed for the Indian market following local research, will offer a range of fresh food, grocery and non-food products to small retailers, restaurants, kirana stores and other business owners.

The outlets, the first of which is expected to open in Mumbai next year, will also provide Indian farmers and other suppliers with a route to market.

Tesco said it is also entering into an exclusive franchise agreement with Trent, the retail arm of the Tata Group.

Under the terms of the agreement, for which Tesco will receive an unquantified fee, Trent will draw on the group's expertise to support the development of its hypermarket business, Star Bazaar.

Tesco's wholesale business will also supply merchandise to Star Bazaar.

Trent currently has four hypermarkets, with plans to grow to 50 stores over the next five years.

Tesco said it already sources over 170 million pounds of Indian products each year, with sourcing offices in Delhi, Bangalore and Tirupur.

'This is another exciting development for Tesco,' said chief executive Sir Terry Leahy.

'It complements our entries into China and the United States, giving us access to another of the most important economies in the world.'

Shares in Tesco closed Monday at 394 pence, valuing the business at 31 billion pounds.