Tesco is set to invest tens of millions of pounds into the supermarket sector in India after winning approval to move into the industry by the country's Foreign Investment Promotion Board (FIPB).
The company is expected to spend £68 million on its expansion into India, via a partnership it is entering with the Tata Group.
A Tesco spokesman confirmed that the UK supermarket giant will now be able to begin working through the “practicalities” of setting up the joint venture with Tata, which is one of the biggest firms in India.
Tesco, which already has a partnership with the Star Bazaar shops operated by Tata, will take a 50 per cent stake in Tata Group's Trent Hypermarket as part of the deal.
Vodafone has also been given the chance to move into the lucrative Indian marketplace after getting the green light from the FIPB.
Companies such as Tesco and Vodafone are trying to break into India as the country has one of the fastest-growing middle classes in the world and firms want to tap into this rapidly expanding market.
As a result of winning approval from the FIPB, Vodafone will now take full control of its Indian business. Vodafone is one of the biggest mobile phone operators in the UK and will be confident of replicating that success in the Asian nation in the coming years.
India has been criticised in the past for being too closed for foreign investment, so the approvals for Tesco and Vodafone to move forward with their investment plans are likely to be welcomed.
Although India was not hit as hard by the global financial crash as many nations around the world, growth has been stifled as a result of the worldwide recession and the government has been urged to take action to get the country's finances back on track.
Tesco's share price is slightly down this morning (December 31st), falling by almost one per cent by 09:30 BST. Stocks in Vodafone were up by 0.11 per cent at the same time this morning.
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