Last updated : December 11, 2017 2:01 pm
Foreign investment is capped at 51% and Indian partners mandatory
On the sidelines of an event organized by the Confederation of Indian Industry (CII), Tata told reporters that the company was awaiting final regulatory approvals for its proposed joint venture with Tesco before opening stores in India.
IThe FIPB approval was conditional. The Centre had said Tesco investment could come only after its Indian partner Trent Hypermarket divested stake in three of its existing Star Bazaar stores across states opposed to foreign investment in multi-brand retail.
The three Star Bazaar stores that Trent must divest stake in are located in
Gujarat (two in Ahmedabad and one in Surat) and Tamil Nadu (one in Chennai).
The chain's first Star Bazaar store had come up in Ahmedabad in 2004.
BJP and AIDMK, which run Gujarat and Tamil Nadu
respectively, are opposed to foreign players setting up shop in their states.
Both Tesco and Trent had refused to reply to a questionnaire sent by Business
Standard earlier this month on the status of divestment of stake in the three
stores across Gujarat and Tamil Nadu.
The FIPB clearance was also conditional for another reason--the investee company was told to approach Maharashtra government for permission to continue to operate the Kolhapur store as the city has population of less than 10 lakh as per 2011 census. Multi-brand norms recommended FDI only in cities with over 10 lakh population, while leaving it open to the states to take a call otherwise.