UK’s supermarket group, Tesco has announced to enter in a wholesale cash-and-carry business in India. The company would invest up to £60 million (Rs 480 crore) in the first two years.

Tesco is the third largest retailer in the world with sales of $99.9 billion. It has reported a 13.9% rise in sales with strong growth in Europe and Asia.

The Tesco group has signed an agreement with Trent, which is a retail arm of the Tata Group. Trent will help Tesco to develop its hypermarket business, Star Bazaar in India. The wholesale business will also supply merchandise to Star Bazaar. The group had also tried to form a joint venture in late 2006 with Sunil Mittal’s Bharti Enterprises, but Bharti group formed JV with Wall Mart.

According to current Indian laws, foreign retailers are not allowed to direct sale to customers in the market. They are allowed to sell to retailer throw franchisees and licences. The Indian norms allow 100 per cent foreign direct investment (FDI) only in cash-and-carry wholesale formats. This format is already chosen by Metro group of Germany and Shoprite of Africa.

Tesco CEO Sir Terry Leahy said that current deal would pave a way for its entry in the most important economies in the world. The group is operating in 13 countries with 3,729 stores and employees strength of over 440,000.