Tesco plans cautious India entry after arm-twisting by politicians

It took months of arm-twisting and assurances from New Delhi to persuade British retailer Tesco Plc (TSCO.L) 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 (WMT), 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 market long dominated by millions of mom-and-pop shops. But on Tuesday, Tesco announced that it had applied to buy a 50 percent stake in Tata Group’s Trent Hypermarket Ltd (TRENT.NS) to open stores in the western state of Maharashtra and neighboring 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.

    

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