Costa aiming to curry favour across India.

Byline: By Iain Laing

Costa Coffee has set its sights on winning over a nation of tea drinkers with plans for a chain of outlets in India.

The business, which is owned by leisure group Whitbread, has struck a franchise agreement with a local partner that it hopes could lead to the opening of more than 300 Costa outlets in the country.

A 60-seat shop is due to open in Delhi's Connaught Place next month, as Costa attempts to attract India's growing young middle class among a nation better known for its thirst for tea.

Mark Phillips, Costa's managing director, said: "People think of India as a tea-drinking nation.

"But the reason we identified India was because its young, affluent middle class like to drink coffee and like to differentiate themselves from the older generation."

Whitbread added in a statement that it was the first internationally recognised coffee shop operator to open in India.

It promised that local tastes will be catered for, with Costa selling sandwiches with chicken tikka or paneer tikka fillings alongside its slow-roasted Italian coffee, which uses beans imported from Venezuela and Kenya.

Mr Phillips added that the chain would eventually use locally-bought coffee.

Costa has more than 350 shops in the UK, but has expanded overseas to include around 60 outlets in the Middle East, operated through franchise partners.

Whitbread operates brands including Travel Inn, Beefeater, David Lloyd Leisure and TGI Friday's.

Whitbread said it had negotiated a franchise contract to open at least 300 stores across India with tycoon Ravi Jaipuria, who leads a large conglomerate with interests ranging from beverages and pizza retail to real estate.

The company has also established a local team based in Delhi and led by Bhaskar Basu, who is working with beverage group Devyani International to establish a local production facility for the food products.

Mr Phillips added: "This is a major deal for Costa and we're delighted to be the first international coffee brand to open in this fast-growing market.

"There are already successful local concepts, so there is a proven consumer demand for the product."