World No.3 retailer Tesco Plc
Earlier this month, India suspended plans to open its $450 billion (287 billion pounds) supermarket sector to foreign firms, backtracking from one of the government's boldest reforms in years in the face of a huge political backlash.
Tesco currently has a franchise agreement with Tata's retail firm Trent
The British retailer is currently focussing on setting up warehouses and back-end infrastructure for the Star Bazaar stores and is not planning to set up cash-and-carry stores, the report said citing sources.
Tesco had earlier this year said it did not plan to enter the southern Indian state of Karnataka with wholesale operations after the state government refused to grant a licence to it due to pressure from local traders.
The company had planned to invest 5 billion rupees $96 million to set up wholesale stores in India, the report added.
Other retailers such as Germany's Metro
Reuters could not immediately reach Tesco for a comment.
(Reporting by Nandita Bose; Editing by Aradhana Aravindan)