India’s Tata Group, which owns Trent Hypermarket, is to divest four stores in states where foreign direct investment is still prohibited.
The Indian government moved last August to open up its potentially lucrative retail sector to foreign companies to try to boost a sharply slowing economy. However, only 12 states have agreed to FDI.
The move is in connection with its partner, British retailer Tesco, which plans to open multi-brand retail stores, and recently applied to initially invest $110 million to acquire 50 per cent stake in Trent, which operates Star Bazaar supermarkets.
It plans to build on Star Bazaar’s 16 store network in Maharashtra and Karnataka states with an expansion plan of opening three to five stores per year.
Its application has been processed by the Department of Industrial Policy and Promotion and is subject for approval by the Foreign Investment and Promotion Board.