Indian Summer for Tesco?
Restrictive direct foreign investment laws in India have resulted in major international retail chains investigating alternative methods of investing in the Asian country.
Bharti Enterprises, a conglomerate in India, has been in talks with both Tesco and Wal-Mart about joint ventures.
Branded retail is a particularly restricted part of the Indian market. Foreign investors can own wholesale operations in India, as well as 51%of single-brand retail operations, but they may not own a majority stake in a multiple-brand retailer.
No details of a joint venture have been disclosed yet, but Tesco is rumoured to have the edge over Wal-Mart, since it already sources fresh food from Bharti. It also runs a non-food sourcing operation in Bangalore.
Bharti Enterprises is no stranger to this kind of joint venture: last year it set up a deal with foreign insurance company Axa Asia Pacific Holdings Ltd.
db May 2006