NEW DELHI: Swedish budget fashion brand H&M and UK supermarket chain Tesco are both planning to expand in India, in a sign that foreign retailers are increasingly targeting the subcontinent's fast-growth retail sector.

Having received initial approval from the Foreign Investment Promotion Board last December to invest $115m (Rs 720 crore), sources have told Livemint that H&M has received regulatory approval to open its first store in India.

H&M should be in a position to open its first flagship store there in the first week of November.

Without revealing which city it planned to target, it is reported H&M hopes to open 50 stores in the country over the next few years and the sources also revealed it wants to expand into online sales.

In a further boost for international retail brands, a senior Tata Group official said on Monday that it expected final regulatory approval for its Trent Hypermarket subsidiary to form a joint venture with Tesco, the UK supermarket giant.

Noel Tata, vice-chairman of Trent Ltd, said the two companies planned to open multi-brand retail stores once they received final approval.

Tesco has proposed initial investment worth $110m (Rs 680 crore) and became the first global retailer to apply for multi-brand retailing after the government permitted foreign investment of 51% in the sector.

Spanish clothing retailer Zara is already a partner with Trent. Elsewhere, Japan's Uniqlo and GAP, the US brand, are also known to be actively seeking to enter the Indian market.

According to a report last month from the Associated Chambers of Commerce and Industry of India, the overall retail market in India is growing at 15% a year and is expected to double in value between 2011-12 and 2016-17.

Data sourced from Livemint; additional content by Warc staff