NEW DELHI (AFP) -India’s Bharti Enterprises, which tied up with Wal-Mart to start a nationwide chain of retail stores, said it will invest about 7.0 billion dollars in the project by 2010, according to a report.

The group, which owns the country’s top private phone firm, said it will set up 200 large stores and hundreds of smaller ones to cater to the increasingly affluent Indian middle class, estimated to be made up of 300 million people.

“Depending on what we do in real estate and logistics, we will invest around seven billion dollars by 2010,” Sunil Mittal, chairman of the group, told the Business Standard newspaper.

Mittal told the newspaper that the group’s realty company will identify property for the venture, from which he expected to earn one to two billion dollars in the same period.

Last month the group tied up with Wal-Mart, the world’s largest retailer, to open stores that would be owned by Bharti and run under a Wal-Mart franchise.

India does not allow foreign investment in retail except for single-brand stores such as Nokia or Nike.

Other foreign groups such as Wal-Mart have to sign franchise deals with local companies to enter the Indian market.

The newspaper report said that the front-end stores would bear the Bharti name, but talks were on to include the Wal-Mart brand as well.

Organised retailing makes up only three to five percent of India’s retail business, with the rest dominated by nearly 15 million traditional mom-and-pop stores.

Earlier this year, India’s biggest private firm Reliance started opening a chain of supermarkets as part of a multi-billion-dollar retail rollout. The company said it aims to have 4,000 stores by 2011, with an annual sales target of 25 billion dollars.

Other major Indian business houses such as the Tata group and the Aditya Birla Group are also moving into the sector, which has annual turnover of about 300 billion dollars.

That figure is expected to double by 2015, according to consultants PriceWaterhouseCoopers.