Yesterday, it was confirmed US retailer Wal-Mart had linked up with Indian telecommunications giant Bharti Enterprises in a joint retail venture. Tesco had been in line for the partnership but pulled out of talks on Friday.
“We've nothing against Tesco. They know their job. But we felt Wal-Mart, on a big scale, was more of a fit,” Rajan Mittal, joint managing director of Bharti, told the Financial Times.
David Stoddart, an analyst at Teather & Greenwood said Tesco was unlikely to face any short or medium term financial impact from missing out on the deal. “Bharti isn't the only way into India,” he added.
However, Asitava Sen, from PricewaterhouseCoopers, warned Tesco could find it difficult to enter India. “Given the foreign direct investment restrictions, global retailers require Indian partners more.”
“Also, as India is a nascent market, there are not too many potential Indian partners. All this gives the bargaining power to the Indian parties.”