British retailer Tesco PLC (L: TSCO) has made its first official tilt at a stake in the Indian retail market, applying to the Foreign Investment Promotion Board to invest US$110 million in a Tata Group-owned retail business.

Business Today reported Tesco had proposed a 50-50 partnership with Trent Hypermarket Limited, which already stocks 80% of the products sold at its Star Bazaar stores from the British multinational.

Indian Commerce and Industry Minister Anand Sharma told reporters the government welcomed Tesco's decision.

"On our part, we assure them all support for expedited clearances. We hope that this will mark a new beginning in transforming India's retail industry. I am sure that the other global leaders will also look at investing in India," Sharma was quoted as saying.

In a BBC report, Sharma pledged support for a streamlined clearance of Tesco's application.

"To begin with, they propose to establish their stores in Maharashtra and Karnataka," Sharma told the BBC.

Business Today reported Tesco's tilt was the first application in the multi-brand retail segment since September when authorities announced foreigners could invest up to 51% in companies in the sector.

"We believe that our understanding of the Indian market, coupled with Tesco's unparallelled global retail expertise, will allow us to leverage the tremendous potential of the market to the benefit of all stakeholders," Trent Limited vice-chairman Noel Tata was quoted as saying.

Photo: Flickr Creative Commons, Mark Hillary

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