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Pehle aap: Carrefour could follow Tesco route into India

by Dec 20, 2013

#Carrefour  #FDI #FIPB #multi-brand retail #retail industry #Tesco #Trent

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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 themandatory $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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8/13/2019 Carrefour Could Follow Tesco Route Into India

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12/20/13 Print :Pehle aap: Carrefour could follow Tesco route into India

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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

http://articles.economictimes.indiatimes.com/2013-12-19/news/45377725_1_fdi-policy-foreign-investment-promotion-board-fipb