Mumbai, Aug 12 (UNI) The Tata Group, India's leading business house, and the UK's largest retailer Tesco today signed a partnership agreement to launch the latter's retail business in India.
Tesco and the Tatas signed a 50:50 joint venture for cash and carry and a franchisee agreement for the front-end. This is the most viable option for foreign retailers wanting to enter India as Indian government does not allow foreign direct investment in direct-to-consumer retail that sells many brands and products. The world's largest retailer Wal-Mart has signed a similar agreement with India's largest telecom company Bharti for its new retail business, a Tesco release said.
Those who know the culture of both Tesco and Wal-Mart say that they complement each other. Both are conservative companies who tread cautiously. They wouldn't make gigantic plans which would be difficult to follow later. Both would take one step at a time, given the low consumer sentiments and still-high real estate prices. One of the reasons why Tesco fell out with the Bharti Group in the last minute, as Bharti was Tesco's first choice, was the fact the two didn't agree on the milestones. While Tesco wanted to follow a more conservative approach, Bharti wanted a rapid expansion of retail.
The latter signed on Wal-Mart subsequently, the release added.
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