LONDON (AP) — Tesco PLC, the world's No. 3 retailer, is entering India with a wholesale cash-and-carry business, the supermarket group announced yesterday.

Tesco plans to invest up to £60 million ($114 million) over the next two years to establish itself in the fast-emerging economy, whose population of 1.1 billion people is the second-largest in the world.

The wholesale outlets, which will be based only in Mumbai initially, will sell fresh food, grocery and certain non-food products to small retailers, restaurants and what are known locally as "kirana stores" — mom-and-pop markets.

At the same time, Tesco is partnering with giant Indian conglomerate Tata Group, the company said yesterday.

Its new wholesale business will supply merchandise to Tata's retail arm, Trent, for its Star Bazaar hypermarkets.

As part of the deal, Tesco will also help Trent to expand its hypermarket business from four current stores to 50 over the next five years.

The wholesale shops are Tesco's first foray into India, but they follow a series of international expansions for the British retailer, which agreed to buy 36 stores in South Korea for $1.9 billion in May.

"This is another exciting development for Tesco. It complements our entries into China and the United States, giving us access to another of the most important economies in the world," Tesco chief executive Terry Leahy said.

Tesco shares rose 0.6 percent to 394.7 pence ($7.50) in London.