FDI setback: Tesco not to invest until clarity emerges

In yet another setback to India's FDI policy on multi brand retail, British retail giant Tesco told CNBC-TV18 that it will not invest in India until clarity on the FDI norms emerges. Tesco's view comes a day after the world's largest retailer Wal-Mart blamed the country's retail FDI policy for the split with Bharti enterprises.

In an email response to CNBC-TV18, Tesco said "As already shared in the past we are excited about the India opportunity and await policy clarity before we can take further decisions on the matter."

Also read: Bharti-Walmart: BMR Advisors calls for a liberal FDI policy

Both Tesco and Wal-Mart have, in the past, raised concerns on norms like 30 percent mandatory sourcing from locals. Moreover, global retailers believe that the green field investment mandated in both back end and front-end are restrictive for existing retail JVs where one partner is an overseas firm. Also, uncertainty on how foreign retailers will be treated in states that undergo a regime change has been a big dampener.

DIPP secretary Saurav Chandra however told CNBC-TV18 on Wednesday that there are no plans to change the controversial norm currently.

Maintaining that it has made substantial investments in India during the last decade, Tesco also said that the company exports nearly half a billion dollars' worth of goods from India for its international sourcing operations.

Tesco is present in India through a partnership with TATA Trent and accounts for 70 percent of all the goods supplied to Star Bazaar stores spread across the country.

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