Abu Dhabi-based Lulu Group plans to invest about US$400 million in a new shopping mall and food processing units in India.
It has earmarked 25 billion rupees for a fruit and vegetable processing unit, an integrated meat processing unit, and a shopping mall in Hyderabad, the capital of India’s youngest state Telangana.
A Telangana government delegation met the group in Abu Dhabi this week.
The shopping mall will be anchored by a Lulu hypermarket and about 150 other brands, said a Lulu spokesman. Once construction work starts, the facility will be ready in two years.
“It’s a new state, the government is proactive in reaching out to us, and it’s attractive to us,” he said.
Grocery retailers’ sales in India topped 16 trillion rupees last year, up from about 14.6tn rupees in 2012, according to Euromonitor International.
There were about 12.4 million grocery outlets last year, much of which are open-air markets and small shops.
Lulu opened its first mall in India in the neighbouring state of Kerala in February last year but has invested in food processing units in Delhi, Uttar Pradesh and Mumbai over the past decade.
Its Kochi mall employed 6,000 people directly when it opened, and an additional 10,000 indirectly.
A Lulu delegation will visit Hyderabad next month.
While India has opened up the multi-brand retail sector to foreign investment, it requires foreign chains to operate with a local partner.
Individual states decide whether foreign supermarket groups can open outlets. The new prime minister Narendra Modi is also opposed to foreign players in the sector, saying it would hurt owners of smaller outlets, which are key employers around the country.
International grocery chain operators such as Tesco invest in India through local partners such as Tata Group. In March the British chain said it would invest £85 million (Dh491.2m) in shops.
Walmart India entered the country in 2009 and owns and operates 20 wholesale outlets in eight states. It parted ways with Bharti Enterprises in October last year.
The French chain Carrefour said in July it would close its five wholesale stores in India by the end of September.
One of the largest players in the retail supermarket is Reliance Fresh, owned by Reliance Retail, which operates 550 outlets in the country. But in July it said it would close 100 retail stores to focus on its wholesale business.
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