In the forthcoming week Indian Prime Minister Manmohan Singh will be urged by Tony Blair to relax certain laws that are stopping British companies doing business in India , according to a report in the Independent. Blair will be hosting the first high-level UK-India investment summit in London, where he will be expected to lobby particularly hard on behalf of supermarkets, such as Tesco . The investment summit will be organised by the government agency UK Trade and Investment (UKTI).
India’s retail market is currently the eighth-largest in the world and analysts expect it to double in value by the end of the decade. Back in January Mr. Singh eased rules for foreign retailers that sell only one brand, such as Nike . The rules now state that they can now own 51 per cent of joint ventures set up with Indian partners, but foreign groups that sell multiple brands, such as supermarkets , are still not allowed in.
The past few years have seen Tesco expand rapidly overseas. So far it has concentrated on continental Europe and Asia , but it now plans to open stores in the US next spring.
Finance and Strategy Director Andrew Higginson confirmed that India was of interest to the retailer. In last week’s results he said, “We have a research project under way and will be coming to a conclusion as to what we do or don’t do [in India] at the end of the year. So far so good, but it’s early days. It’s also not possible for foreign companies to own retail assets at the moment”.
The Independent goes further, saying that Manmohan Singh will also be urged in to relaxing restrictions on foreign investment, such as in banking and telecom, by Mr. Blair and the other UK business leaders. Once talks have commenced there will be representatives present from Barclays Capital, Orange , Indian conglomerate Tata, and the Federation of Indian Chambers of Commerce and Industry.
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