Starbucks eyes India through franchise - report

MUMBAI, April 27 (Reuters) - Starbucks Corp. (SBUX.O), the world's largest coffee shop chain, will take a franchise route to India rather than a planned joint venture, the Mint newspaper said on Friday, citing a senior government official. Starbucks has refiled its application, and will now operate through V.P. Sharma, its Indonesian franchisee, who will own 51 percent in a venture with India's Future Group founder Kishore Biyani, the paper said.

"Starbucks is out of it (the new application)," a senior official at the ministry of commerce and industry told Mint.

"Sharma will represent Starbucks now," he said.

Sharma and Biyani declined comment to the newspaper.

India had not cleared Starbucks' earlier application in December, where Starbucks had said it would hold 18 percent in a venture with New Horizons Retail Pvt. Ltd., a company founded by Sharma and Biyani, Mint said.

But Sharma is a non-resident India, and his holding together with the coffee chain's holding crossed the 51 percent that the Indian government allows single-brand foreign retailers to take in a venture with an Indian partner, the paper said.

The official did not say when the new application would be cleared, the newspaper said.

Italy's Lavazza in March bought Barista Coffee Co. Ltd.'s Barista coffee chain and Fresh and Honest Cafe Ltd. from its Indian owner.

The proposed entry of foreign firms in India's strictly controlled retail industry has sparked political concerns and protests from small shop owners who fear job losses.

((Reporting by Rina Chandran, editing by Ranjit Gangadharan; Reuters Messaging: rina.chandran.reuters.com@reuters.net; +91 22 6636 9251)) Keywords: STARBUCKS INDIA/

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