Starbucks delaying India coffee shops plans

LOS ANGELES (Reuters) - Starbucks Corp. (SBUX.O) said on Monday it was delaying a plan to begin opening coffee shops in India later this year. It did not give a reason for the postponement.

India is one of five nations that Starbucks has said it is focusing on for international expansion. The others are Russia, China, Egypt and Brazil.

Seattle-based Starbucks said in an e-mailed statement that it withdrew its application to open retail stores in India and that it "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."

A company spokesman, Brandon Borrman, said Starbucks remains committed to opening stores one day in India, but would not give a timeline.

Starbucks first said last October that it planned to enter India by the end of 2007, though reports have surfaced in recent months that the company was having difficulties getting its application approved by Indian officials.

Last month, India's Business Standard newspaper said the country's Department of Industrial Policy and Promotion said Starbucks' plan to enter India through a franchisee was not acceptable because the franchisee, Indonesia's V.P. Sharma, was a nonresident Indian.

Starbucks was to file a fresh application, the newspaper reported, with Indian government officials saying the U.S. company should enter the nation through a foreign direct investment route.

Foreign single-brand retailers can take 51 percent in a venture with a local Indian partner. Starbucks, however, has said it prefers to enter international markets through a franchisee so that it does not have to risk its own capital.

Starbucks shares were up 42 cents, or 1.5 percent, at $28.12 in afternoon trade on Monday.