Tesco suspends wholesale plans in India Monday, 12th December 2011

The world’s third largest retailer has suspended its plans to set up wholesale stores in India for now, according to reports from the Business Standard newspaper on Monday.

Earlier in December, India put plans to open its USD 450 billion supermarket sector to foreign firms on hold, in a move seen to backtrack on one of the government’s boldest reforms in years, after huge political backlash from within the government.

Tesco currently operates a franchise agreement with Tata’s retail firm Trent, under which the Indian firm’s hypermarket chain Star Bazaar uses the company’s supply chains and infrastructure.

The British supermarket giant is currently focussed on setting up warehouses and back-end infrastructure for the Star Bazaar stores, but according to the report has no plans to set up its own cash-and-carry stores.

Earlier this year Tesco put a stop to plans to enter the southern Indian state of Karnataka with wholesale operations after the state government refused to grant a license to it due to pressure from local traders.

Tesco had apparently planned to invest INR 5 billion (USD 96 million) to set up whole stores in India, the report claimed.

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Posted in Food, Franchise & Expansion Tagged tesco, india, expansion, franchise, wholesale, food, invest, star bazaar, tata