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French retailer Auchan plans 60 stores in India

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(Globalpost/GlobalPost)

French retailer Auchan, one of the world's biggest hypermarket chains, aims to set up 60 stores in India to tap the emerging market nation's growing retail potential, an Indian minister said.

Last year, India's Congress-led government relaxed legislation to allow foreign retailers such as US supermarket giant WalMart to set up shop in India and sell directly to Indian consumers to boost investment from abroad.

Trade minister Anand Sharma told reporters on the sidelines of a business conference in New Delhi Wednesday: "(Officials of) the Auchan group met us yesterday... they want to open 60 stores in India."

It was not immediately known whether Auchan planned to establish franchise operations or set up their own direct retail outlets. It already has 13 hypermarkets in India under a franchise deal with Max Hypermarket India.

Sharma added global firms like Britain's Tesco supermarket chain have filed applications to establish sourcing bases in India and the government had received "a letter" from French retail heavyweight Carrefour, without elaborating.

There was no comment available from Auchan.

But on Tuesday Auchan group global chairman Vlanney Mulliez said after meeting Sharma that he was "very enthusiastic about the Indian market".

He added the group was still studying the new retail rules introduced by the government last September that allows 51 percent foreign direct investment in multi-brand retail.

The rules also stipulate that foreign retailers planning to enter the multi-brand sector would have to invest a minimum of $100 million, with 50 percent of it in backend infrastructure such as supply chains.

Last August Auchan and Max Hypermarket India signed a franchise agreement for development of the hypermarket business in India and said they planned to open 12-15 new stores in a year across India.

Swedish retailer IKEA is awaiting final government clearance to enter India and invest $1.9 billion in coming years. It hopes to open 25 of its trademark blue-and-yellow stores in India as part of a wider emerging markets push.

IKEA's entry into India is being closely watched by rivals as a test case for how a large foreign corporation navigates India's byzantine rules and red tape.

US supermarket chain Walmart has also announced plans to open its stores in India. But the company is now being probed by Indian authorities over whether it broke the law through its US lobbying activities on matters the retailer said were related to "enhanced market access for investment in India".

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http://www.globalpost.com/dispatch/news/afp/130403/french-retailer-auchan-plans-60-stores-india