FIPB clears Tesco’s $110 m multi-brand retail proposal

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.

FILE - People pass by a branch of British retailer Tesco, in London, in this file photo dated Tuesday, Oct. 6, 2009. Tesco PLC, Britain's largest supermarket operator, announced Wednesday April 17, 2013, that it will close its six-year-old U.S. operation after losses at the U.S. Fresh & Easy chain undercut stronger earnings in the U.K. after net profit for the year dropped 96 percent. (AP Photo/Alastair Grant, FILE)

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 Secretary 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.