the world's largest coffee retailer on Friday withdrew
its application from the Foreign Investment Promotion
Board (FIPB), almost a month after the Indian government
asked it to revise its entry proposal for the second
time. With speculation about the government further
tightening franchisee regulations gaining strength,
foreign players like Starbucks have become anxious.
The Seattle-based coffee chain had proposed to enter
India via the franchisee route, but was told by the
Indian government to consider the FDI route instead.
Indian laws currently allow up to 51% FDI in single-brand
In a press statement, a Starbucks spokesperson said:
"Starbucks has notified the ministry of commerce
& industry and FIPB that we decided to postpone
our entry into India and officially withdraw the application
to operate single-brand retail stores in this country.
The company didn't give any timeline for its postponed
India debut. "It is premature for us to announce
any new dates. We remain excited about the great opportunities
that India presents to Starbucks. We look forward to
offering high-quality coffee, handcrafted beverages,
legendary service and the unique Starbucks experience
to customers in India at a later date," said the
Starbucks first announced its decision to enter India
in 2006. Its first application with FIPB was rejected
due to 'lack of clarity' over the foreign shareholding
in the Indian company.
In April, this year, Starbucks submitted a revised application,
stating that it would not hold any equity in India operations
managed by New Horizons Retail, its licensee for India.
Last month, the DIPP rejected their proposal again and
asked the company to take the 51% FDI route.
Starbucks had hoped to be in the Indian market, starting
in Mumbai this summer. The plans got postponed to winter
and now they have been postponed indefinitely.