India’s biggest private company Reliance Industries had kicked off its Rs 25,000 crore mega retail plans, by aiming to launch its first store in the souther city of Hyderabad next month, which will be a vegetable and food store. This is a part of a plan to build an Indian version of “Wal-Mart”, the world’s largest retail chain. Mukesh Ambani, chairman of Reliance Industries, has said he wants to make the retail chain “a Wal-Mart in India” with an annual sales target of $25bn by 2011.

“We will be opening our first store in Hyderabad in September and this will be a very large store with food, vegetables and staples,” Reliance Retail President and Chief Executive (operations and strategy) Raghu Pillai told reporters on the sidelines of a CII conference.

Reliance, whose main business is petrochemicals, has said it plans to invest nearly six billion dollars in setting up the store subsidiary covering nearly 1,500 cities and towns in India. The Indian corporate giant had announced a Rs 25,000 crore investment in the retail sector in June this year and said that it would be listing the company subsequently.

Pillai said the company, which Reliance intends to list on the stock market, “plans to be across the country … as soon as we can” and would quickly reach 100 stores but gave no specific timeframe. He said Reliance Retail would offer competitive prices by removing “extra costs from the supply chain.” As part of its drive to cut costs, it is considering partnering consumer durable companies to procure goods directly and sourcing items from low-cost manufacturers like China.

Reliance has already signed agreements with the West Bengal and Punjab governments as it moves forward in tying up for procurements and roll out. “We are in talks with quite a few state governments and cooperative chains for alliances,” he said. “We are talking to everybody. It is still very much in the project stage. On the ground, you will see huge action next year,” said Pillai. He added that strategies were still being worked out.

Asked whether high real estate prices were affecting Reliance’s retail plans, Pillai admitted that while prices were unrealistic in some parts of the country, it is only one element of its capital expenditure. Reliance said its real estate model would include ownership as well as land lease. The company is in talks with developers across the country.

US retailer Wal-Mart is the largest retailer in the world, having revolutionised the business through a super efficient management system overseeing thousands of suppliers.

India’s retail market is reckoned by analysts to be worth around $200bn a year. It is dominated by small mom-and-pop street corner stores with organised retail outlets comprising just two per cent of the sector.