Blair tries to clear Tesco's passage to India

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The Independent Online

Tony Blair will this week urge the Indian Prime Minister, Manmohan Singh, to relax laws stopping British companies doing business in his country.

Mr Blair is expected to lobby particularly hard on behalf of supermarkets such as Tesco when he hosts the first high-level UK-Indian investment summit in London, organised by the government agency UK Trade and Investment (UKTI).

India's retail market is the eighth-largest in the world and analysts expect it to double in value by the end of the decade. In January, Mr Singh eased rules for foreign retailers that sell only one brand - such as Nike. They can now own 51 per cent of joint ventures set up with Indian partners. But foreign groups that sell multiple brands, such as supermarkets, are still not allowed to operate in India.

Tesco has expanded rapidly overseas in recent years. So far it has concentrated on continental Europe and Asia, but it plans to open in the US next spring, and finance and strategy director Andrew Higginson confirmed last week that India was of interest to the retailer.

Unveiling interim pre-tax profits of £1.2bn, he said: "We have a research project under way and will be coming to a conclusion as to what we do or don't do [in India] at the end of the year. So far so good, but it's early days. It's also not possible for foreign companies to own retail assets at the moment."

Mr Blair and the other UK business leaders present at the talks will also urge Mr Singh to go further in relaxing restrictions on foreign investment. Retail banks face difficulties opening branches in India, and there are limits on the level of foreign ownership of local banks.

Representatives from Barclays Capital, the mobile phone company Orange, the Indian conglomerate Tata, the CBI and the Federation of Indian Chambers of Commerce and Industry will be present at the talks.