UK retailer Tesco has confirmed that it will invest GBP85m (US$132m) to establish a multi-brand retail joint venture with Trent Ltd, part of the Tata Group, in India.

The groups had signalled that they were looking at a deal to see Tesco take a 50% stake in Trent at the end of last year.

The news follows regulatory approval of the move from India's Foreign Investment Promotion Board, Tesco said at the end of last month. 

Tesco is the first international retailer to take advantage of the easing of Indian restrictions on foreign direct investment in multi-brand retail.

Foreign companies were prohibited from investing in multi-brand retail outlets in India and overseas retailers like Tesco sought wholesale and franchise deals.

However, last year, India said it would allow international investors to own up to 51% of multi-brand outlets.

In December, Swedish fashion retailer Hennes & Mauritz (H&M) was given the go-ahead to open 50 single-brand retail stores in India with an investment of INR7.2m.