12/20/13

Print :Pehle aap: Carrefour could follow Tesco route into India

Pehle aap: Carrefour could follow Tesco route into India

by Dec 20, 2013 #Carrefour #FDI #FIPB #multi-brand retail #retail industry #Tesco #Trent EmailPrintShare
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After the initial failure with the world's largest retailer Walmart, India's multi-brand FDI policy finally seems to be working as UK retailer Tesco has decided to seek the FIPB nod for a $110 million investment in its joint venture with Tata Group's Trent Hypermarket. And even though Tesco claims the decision to invest in India came after months of arm-twisting and assurances from the government, its India entry will now be considered as a test case for FDI in the retail sector.

] Reuters Depending on how the government responds to Tesco's application, French Group Carrefour will move forward with its application to invest in multi-brand retail stores in India since the government's policy riders such as the mandatory $100 million investment must only fund new ventures, is being seen as a hurdle by many global players. According to a report in the Business Standard, Carrefour is in talks with potential partners, including Kishore Biyani's Future group and K Raheja Corp-owned Hypercity, for a possible alliance. Earlier this year, Wal-Mart walked away from India and very few expected its rivals to step in before elections due by next May. But Tesco's decision clearly marks a victory for the Congress party in securing its first foreign investment victory after announcing its intent on reforming the supermarket sector.
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12/20/13

Print :Pehle aap: Carrefour could follow Tesco route into India

Tesco and Wal-Mart lobbied the government for years to allow global brands into the country. The door finally opened at the end of 2012 when the government, desperate to attract foreign investment as economic growth fell to its slowest pace in a decade, overrode stiff opposition from coalition allies and opposition parties. But the government's plans were dealt a heavy blow in October when Wal-Mart called off its Indian wholesale joint venture and postponed its entry plans, blaming unfriendly regulations and political uncertainty. Company sources were quoted by Reuters as saying there had been numerous meetings with the government throughout the year, and talks intensified in recent weeks. Tesco's investment in India is widely expected to be cleared without much political opposition. Yesterday, the Economic Times reported that the government has put Tesco's proposal on the fast track to send a strong signal that India is keen on attracting overseas investment. The Foreign Investment Promotion Board (FIPB) is likely to take up Tesco proposal at its next meeting, which is expected to be held on 26 December. With inputs from Reuters

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