In a move that could signal entry of the British retail major TESCO into India, TESCO has decided to set up an Indian subsidiary to buy fresh and processed foods from the country for its global stores.
This was conveyed by the retail major to the Commerce and Industry Minister Anand Sharma during his meeting with TESCO CEO Phillip Andrew Clarke in London on Friday. Mr. Sharma expressed that this move will pave the way for the formal entry of the retailer’s entry into India in the multi-brand retail stores. It is learnt that TESCO is in talks with the Tata Group to set the ball rolling in India and is likely to make its debut from Bangalore and Mumbai this year.
TESCO Plc. is a global grocery and general merchandise retailer headquartered in Cheshunt, UK. It is the third-largest retailer in the world measured in terms of revenues after Wal-Mart and Carrefour. The company has 5,380 stores‚ 4,92,714 employees and a turnover of US $100 billion and over 60 million customers.
Mr. Sharma was informed that UK retailer buy around 7 per cent of its international sourcing from India through its international sourcing offices in New Delhi and Bangalore and this is the first instance that it is opening a dedicated sourcing arm in India. Tesco has announced its plans to source products with a retail value of US $596 million during the 12 months ending February 2013. The move could help Tesco build back-end operations which will be handy when it decides to enter the country.
Earlier, addressing a round table of CEOs and investors in London, Mr. Sharma said India’s drive to build infrastructure too will be a growth driven. The country has drawn up plans for US $1 trillion worth of investments during the next five years of which half will come in the shape of private investments. India will be spending US $290 billion in the power sector, US $172 billion in telecommunications, US $178 billion on roads and bridges, US $90 billion in railways infrastructure, US $31 billion in ports, US $14 billion in airports and US $48 billion in non-conventional energy sector.
"The annual foreign direct investment into India grew by 10 fold from US $4.3 billion in 2004-04 to US $46.6 billion in 2011-12. Though we were slow in opening the FDI, we have received FDI in excess of $277 billion, bulk of which has come in the last 5 years,’’ he remarked.
