Britain's Tesco has sealed a joint venture agreement with a unit of India's Tata Group that will see it invest $140 million and become the first foreign supermarket to enter the country's $500 billion retail sector.

Tesco said yesterday that following receipt of approval from the Indian Foreign Investment Promotion Board (FIPB), it has entered into a deal with Trent Limited to form a 50:50 joint venture with the operator of the Star Bazaar retail business, Trent Hypermarket Limited (THL).

The world's third-largest retailer, which since 2008 has had a franchise agreement to provide support to Star Bazaar, had made the application to FIPB in December.

On completion of the transaction THL will operate 12 stores retailing a range of merchandise including food and grocery, personal and home care products, home and kitchen, fashion and accessories.-Reuters