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The New York Times has a story this morning saying that Tesco, the worlds third ranked retailer, plans to create a wholesale cash-and-carry business in India, and will work with an Indian company, the Tata Group, that is growing a hypermarket business there.

Current Indian law prevents outside ownership of retail business in India, though the arrangement with Tata does give Tesco the ability to launch its own retail stores there should the legislation change.

The Tesco-Tata deal is said to be similar to an arrangement reached by Walmart with Bharti Enterprises, which gave the world’s biggest retailer a foothold in India, which currently has a $350 billion retail industry that some estimate could double within seven years. For a fee, Tesco will provide retail expertise and technical support to Tata, which currently owns four hypermarkets.

Tesco’s investment in the cash-and-carry business is said to be about $115 million (US) for the first two years. The Times notes that Tesco “plans to open its first outlet in Mumbai towards the end of next year, with further distribution hubs in Delhi and Bangalore that will support a network of smaller cash-and-carry stores supplying thousands of small retailers and restaurants.”

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