By Reuters http://gulfnews.com
Mumbai: It took months of arm-twisting and assurances from New Delhi to persuade British retailer Tesco Plc to take the plunge and become the first foreign player to set up a chain of supermarkets in India.
Earlier this year, world No.1, Wal-Mart Stores Inc, walked away from India and few expected any of its rivals to step in before elections due by next May, which could bring to power a government that reverses the opening up of a $500 billion (Dh1.83 trillion) market long dominated by millions of mom-and-pop shops.
But on Tuesday, Tesco announced that it had applied to buy a 50 per cent stake in Tata Group’s Trent Hypermarket Ltd to open stores in the western state of Maharashtra and neighbouring Karnataka, The decision marked a victory for the ruling Congress party in securing its first foreign investment victory after staking its political survival on reforming the supermarket sector.
“We were under phenomenal pressure from the Indian government to apply and frankly phenomenal pressure is an understatement,” said a senior Tesco official, who spoke on condition of anonymity. “The pressure was intense on a government-to-government level.” A Tesco spokesperson did not comment on the reasons behind the company’s decision to enter India now. More info