Tesco has set out plans that will help it to become the first global chain to enter India since the Government relaxed the rules on foreign investment over a year ago.

Under the plans, Tesco will invest approximately $110 million for a 50% stake in Star Bazaar supermarkets, with a plan to open between three and five stores every year.

"We hope that this will mark a new beginning in transforming India's retail industry. I am sure that the other global leaders will also look at investing in India," the country's trade minister Anand Sharma said.

The move will make Tesco the first global chain to enter the country since the Government relaxed its laws and allowed foreign retailers to own majority stakes in supermarkets and stores selling multiple brands, giving it the edge over global rival Walmart.