Tata Coffee, Starbucks close to setting retail stores in India: report

Tata Coffee Ltd, India's largest coffee producer and exporter, and Starbucks, the iconic US coffee chain, are likely to announce a joint venture for setting up retail stores in retail outlets in India, The Wall Street Journal today reported, citing a person familiar with the matter.

Howard Schultz, chairman of Starbucks had said in January that India has the potential to rival China, where the company has around 500 outlets.

The Seattle-based company had signed a non-binding memorandum of understanding (MoU) in January with Tata Coffee for sourcing and roasting high-quality green coffee beans and to explore the possibility of opening retail stores and hotels in India.

Starbucks, which runs the world's largest coffee shop chain, has been trying to enter India for many years, but has been unsuccessful in its efforts so far. It was earlier reported to be in talks with DB Realty and Jubilant Group.

Under India's foreign investment rules, a single-brand retailer can hold only upto 51 per cent of the joint venture with a local partner.

In a lobbying disclosure reports filed with the US Senate in the first quarter of 2011, Starbucks lobbyists have discussed with Senator's to help facilitate its entry into the highly lucrative Indian market.