Tesco has applied to open multi-brand stores in India, the UK retailer and Indian officials have said.
The company has applied to India's Foreign Investment Promotion Board and plans to invest $110m (£68m).
With this, Tesco becomes the first global retailer to try to enter India since it allowed foreign investment in multi-brand retail last year.
If the application is successful, Tesco will enter the country in a 50-50 partnership with India's Tata group.
Correspondents say the decision brings much-needed relief to the government, which allowed foreign investment in multi-brand retail in September 2012, but had not attracted even a single application until now.
"We welcome the decision of Tesco to invest in India," Commerce and Industry Minister Anand Sharma said.
"And on our part, we assure them all support for expedited clearances. To begin with, they propose to establish their stores in Maharashtra and Karnataka.
"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," he added.
Tesco said it would invest in the Tata-owned Trent Hypermarket Limited, which operates Star Bazaar and Star Daily in the western state of Maharashtra and the neighbouring southern state of Karnataka.