Strong aroma

New Delhi, April 15: Global coffee chain Starbucks has renewed its efforts to enter India though it is yet to make up its mind on a local partner.

Sources said the company was looking for local master franchises to open outlets and was exploring the real estate markets in Calcutta, Delhi and Mumbai to set up a unit.

“Starbucks had previously expressed its interest in entering India; however, we did not select a site or announce a partner,” a company spokesperson told The Telegraph.

Earlier, a news agency quoted Starbucks’ chief executive Howard Schultz as saying, “We are enthused about India.”

Starbucks had announced its plans to enter India in 2006. However, its attempts failed because of a lack of regulatory approvals.

Four years ago, the coffee retailer’s application to the foreign investment promotion board (FIPB) was rejected because of a lack of clarity on the foreign shareholding structure of the proposed Indian venture.

The FIPB had stated that the joint venture between Starbucks’ Indonesian franchisee V.P. Sharma and Future Group CEO Kishore Biyani exceeded the foreign investment limit. India allows foreign investors to own 51 per cent in single-brand retail.

According to analysts, Starbucks has taken a hit at home because of reduced consumer spending and is, therefore, looking at emerging economies such as India. The coffee culture is also undergoing a change in India with coffee bars turning into office-away-from-office for small enterprises.

With competition limited to only two home grown chains — Cafe Coffee Day and Barista — and one UK-based Costa Coffee, analysts said there was scope for new entrants in the fast growing coffee market in India.

Australian coffee giants — Cafe BB’s and Coffee Club — plan to enter India next year. Other international chains such as UK-based Coffee Republic, Italian Caffe’ Nero and Germany’s Cup Cino are also looking for retail partners in India.