The world's third-largest retail group, the UK-based Tesco PLC has inked a partnership agreement with Trent, the retail arm of the Tata Group, to develop a wholesale cash-and-carry business in India.

Under the deal, Tesco will work with Trent, to develop its Star Bazaar hypermarket, for which it will get a fee for helping to expand Star Bazaar from present 4 stores to 50 hypermarkets over the next five years.

The new wholesale outlets, wholly owned by Tesco, will offer a comprehensive range of fresh food, grocery and non-food products to small retailers, restaurants, owner-run general stores and other business owners. The first cash and carry business will be built in Mumbai by the end of 2009.

However, the cash and carry stores will source most of its products from India.

Alongside, Tesco also plans to invest £60 million over the next two years. Presently, Tesco already sources over 170 million pounds worth of Indian products each year, with sourcing offices in Delhi, Bangalore and Tirupur.

The British Group also employs nearly 3,000 Indian staff at its Hindustan Service centre in Bangalore that provides information technology, financial and business services to the entire Tesco Group.

Earlier, Tesco had been in talks with the Sunil Mittal-led Bharti Group for a possible tie-up but the negotiations ended without a deal. Tesco Group has 3,729 stores, employing over 440,000 persons in 13 countries. The company reported sales of US$ 99.5 billion during the year ending February 2008.