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Originally published October 19, 2012 at 3:00 AM | Page modified October 19, 2012 at 2:04 PM

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Starbucks opens its first cafe in India

Mumbai cafe features Indian-grown and roasted coffee.

Seattle Times business reporter

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After years of delays, Starbucks opened its first cafe Friday in India.

The two-story location in Mumbai features local design, Indian teakwood furniture and espresso drinks made from Indian-grown and roasted coffee. The company plans to open two more Mumbai stores in the next week.

As the world’s most populated country after China, India represents a major opportunity for growth for many fast-food chains. Starbucks and others only recently firmed up plans to enter the market, in part because the government has eased strict rules about foreign investment.

Arriving five years after it expected to, Starbucks competes with an entrenched coffee culture, including one chain — Café Coffee Day — that has more than 1,000 Indian locations.

Chief Executive Howard Schultz, who was in Mumbai for the opening Friday, said, “There certainly is a lot of coffee being sold here.”

He isn’t worried.

“The quality of the coffee and presentation and execution are far, far behind what we do every day,” he said of the existing cafes. “Any of the stores located in India by our so-called competitors, we would never occupy or operate. These people are in a completely different business than we ever have been.”

In an unusual twist for the ubiquitous chain, Schultz said, “We never intended to have the largest number of stores in this country.”

Starbucks will become a leader in other ways, he said.

“We decided we needed to significantly elevate the physical presentation, the design and quality of the experience way before someone actually tastes the coffee. And the environments we’ve created are so stunning right from the instant you walk in the store, there’s going to be such a level of separation visually between us and everybody else,” Schultz said.

He declined to say how many stores Starbucks eventually might open in India.

Starbucks put the name of its Indian business partner, the conglomerate Tata, on its store signs, which read “Starbucks Coffee: A Tata Alliance,” something Schultz said he hopes will build awareness and trust with Indian consumers.

The alliance appears to be good for Tata as well. Its stock rose more than 10 percent in two days when the companies said they were close to opening the first cafe.

Starbucks is using Indian-grown and roasted coffee in its espresso drinks there, its first use of Indian coffee in years and possibly a sign that the quality of the country’s coffee crop has improved.

“Many, many years ago, we did buy coffee from India, but there were some issues and over time we were just not buying coffee from India,” Schultz said.

Part of the partnership with Tata includes further improving the quality of Indian-grown coffee and raising its profile around the world.

The first store in Mumbai is in the historic Elphinstone Building at Horniman Circle. It carries Himalayan mineral water, Tata Tazo tea (Starbucks’ Tazo tea with the Tata name attached) and a menu that includes local flavors, such as murg tikka panini and tandoori paneer roll.

The other two Mumbai stores opening in the next week are at Oberoi Mall and the Taj Mahal Palace Annex. Starbucks also plans to open cafes in New Delhi, but has not said when.

Melissa Allison: 206-464-3312 or mallison@seattletimes.com. Twitter @AllisonSeattle.

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