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Tesco pumps in Rs 850 cr in multi-brand retailing in India
27
Apr '15
British retail major Tesco has invested Rs 850 crore in multi-brand retail trading in India. Tesco was the first global retailer to apply for multi-brand retailing after the government allowed 51 per cent FDI in the segment in September 2012.

"Government approved a proposal from Tesco Overseas Investment Ltd (Tesco), a UK company, for foreign investment of not less than $110 million to carry out business of multi-brand retail trading in India. The FDI inflow reported by the RBI from Tesco is Rs 850 crore," commerce and industry minister Nirmala Sitharaman said in a written reply to the Lok Sabha.

In March last year, Tesco had announced formation of an equal joint venture with Tata group company Trent by picking up 50 per cent stake in Trent Hypermarket Ltd (THL). THL operates the Star Bazaar retail business in India.

The minister also said, "Government has not taken any decision with regard to implementation of FDI policy in multi-brand retail trading".

The BJP, which got a massive mandate in the general elections last year, had opposed foreign direct investment (FDI) in multi-brand retail in its manifesto.

Currently, 51 per cent FDI is permitted in multi-brand retail.

Tesco Group’s preliminary results for 2014-15 announced this week showed 1.4 billion pounds in trading profit, in line with expectations. But the results showed significant reduction in UK trading profit, as previously announced. It also noted tough trading conditions overseas, especially in Korea and a disappointing performance in Europe.

Dave Lewis, Chief Executive of Tresco acknowledged the challenging times for the group. “It has been a very difficult year for Tesco. The results we have published reflect a deterioration in the market and, more significantly, an erosion of our competitiveness over recent years. We have faced into this reality, sought to draw a line under the past and begun to rebuild, and already we are beginning to see early encouraging signs from what we’ve done so far,” he said. (SH)

Fibre2fashion News Desk - India

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