Retail giant Tesco has today (12 August) announced its intention to develop a wholesale cash-and-carry business in India.

With an initial investment of up to GBP60m (US$115) in the first two years, the business will be based in Mumbai.

The outlets will be designed for the Indian market and will offer a range of fresh food, grocery and non-food products to small retailers, restaurants, kirana stores and other business owners.

Sir Terry Leahy, CEO of Tesco said of the “exciting” development: “It complements our entries into China and the United States, giving us access to another of the most important economies in the world. Our wholesale cash-and-carry format will bring improved value, range and service to thousands of Indian businesses.”

Tesco is also entering into a franchise agreement with Trent, the retail arm of the Tata Group for a fee. The deal is expected to support the development of its hypermarket business, Star Bazaar with a further 50 store openings in the next five years.

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Tesco’s wholesale business will supply merchandise to Star Bazaar, enabling the two companies to benefit from the development of a modern supply chain.

Tesco currently has sourcing offices in Delhi, Bangalore and Tirupur and employs around 3,000 Indian staff at its Hindustan Service centre in Bangalore.