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Last Updated: Tuesday, 3 October 2006, 09:14 GMT 10:14 UK
Tata joins Indian retail pioneers
A computer market in New Delhi
Higher incomes means Indians have more spending power
Tata, the Indian conglomerate whose business interests vary from telecoms and IT services to steel and tea, is opening its own chain of shops.

It is working with Australian retailer Woolworths to source consumer electronics products for its new business, known as Infiniti Retail.

India's surging economy has boosted spending power, and the retail sector is worth an estimated $250bn (140bn).

But 95% of the sector is still made up of small family-run stores.

R Krishna Kumar, director of Tata Sons Group, said retail was "exploding" in India.

He said higher incomes were giving people a greater ambition to acquire "new lifestyles, entertainment and consumer goods".

"We are very sharply focussed on retail, and the foray into consumer electronics and durables will further strengthen Tata's presence in the growing retail industry in India," he said.

Foreign investment

The Tata Group encompasses more than 90 companies, which produced total sales of more than $22bn last year.

A small local grocery store in India
There are about nine million small grocery shops in India

Earlier this year, rival Indian conglomerate Reliance Industries announced plans to invest $5bn creating a chain of hypermarkets and back-end retail services across the country.

And it is not only domestic companies driving India's retail revolution - foreign firms are also eyeing up the Indian market.

The government has traditionally had a protectionist stance towards the sector, but is gradually easing its restrictions on foreign investment.

It has conducted an impact analysis of how the arrival of international giants like Carrefour and Wal-Mart would affect its retail industry.

UK supermarket chain Tesco today said it was poised to enter the Indian market, having sent a research team over to India to explore the possibilities.

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