New Delhi: Starbucks Corp., the world’s biggest coffee-shop chain, has postponed its plan to enter India.
Starbucks withdrew its application to operate single-brand retail stores here, said T. May Kulthol, a spokeswoman of the Seattle-based company, in an e-mail. She didn’t give a reason for the withdrawal.
“Starbucks is reviewing all our options and evaluating how we will proceed related to our entry into one of the fastest growing economies in the world,” said Kulthol. Starbucks said back in August that it was looking for a venture partner or a licensee to enter India by the end of 2007.
Starbucks planned to enter India in partnership with Kishore Biyani, founder of Pantaloon Retail India Ltd, the country’s biggest listed retailer, and V.P. Sharma, head of the US company’s Indonesian franchise. In January, India’s investment board questioned the shareholding of Sharma in the proposed Indian venture with Biyani.
Maybe later: Starbucks is the world’s biggest coffee-shop chain.
The government had asked the coffee chain to file a revised proposal clarifying the investment pattern of the company that plans to open stores in India, Ajay Dua, secretary in the department of industrial policy and promotion, had said on 25 June. The government said the proposed local unit didn’t comply with foreign direct investment rules, which allow as much as 51% foreign ownership in single-brand retail chains.
In a telephone interview, Biyani would only say that Starbucks “may have withdrawn their application because permission was denied to them. They have changed their application once, and this time they may have decided to withdraw.” He declined to elaborate.
Saumya Roy of Mint contributed to this story.