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Tesco is a multinational and multi-brand retailer and playing a vital role in retail industry. It has over 6,000 stores globally, selling a wider range of goods, including groceries, stationary and books, general merchandise, clothing and electronics (OneSource, 2013) (Percy, 2012). It has been operating in 14 countries across worldwide, employs over 500,000 people.(Tesco PLC, 2012). Tesco has already entered in the Indian Retail sector in form of direct franchise agreement with Tata Group retail company, namely Trent. This is a direct franchise agreement with Trent, in terms of which Trent has exclusive access to Tesco’s retail expertise.(Tata.com, 2009).

Tesco’s initial Indian retail entry mode may be attributed to Government regulations, which prohibited foreign direct investment (FDI) in India. Until now, foreign retailers could only invest in wholesale or cash-and-carry ventures with Indian businesses, which was Wal-Mart’s chosen entry mode to the Indian market (Russell, 2013). However, as of November 2012, the Indian Government has removed the former FDI restrictions and now permits non-Indian companies to engage in joint venture arrangements with Indian companies (an intermediate form of market entry) or establish Indian subsidiaries where the non-Indian company owns and controls up to 51% of the subsidiary company (Hollensen, 2011) (Russell, 2012) (International Business Times, 2012).

The purpose of this report is to examine the international human resources management issues that may arise in a potential expansion of Tesco’s existing business in India, as described above. The report examines both the legislative framework and the differences and similarities between UK and Indian employment laws, and also considers the key human resources management strategies that Tesco needs to take account of when expanding its business in India. The report concludes with recommendations as to how Tesco may adapt its existing approaches to human resources...