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2026.03.24
India brings to mind chai, but it is in fact also a major coffee power, with the world's seventh-largest coffee production. In the 2024/25 harvest year, India accounted for about 4% of global coffee production (source: Global Coffee Report).
Chai has formed one cultural sphere as a national drink consumed multiple times a day across North India, while coffee has formed another as a beverage that developed mainly in South India. Understanding the difference between the two is India Market knowledge, essential for anyone considering F&B expansion there.
Chai is characterized by a complex flavor in which the warmth of cinnamon, the bite of ginger, the sweet aroma of cardamom, the spiciness of black pepper, and the earthy taste of black tea all blend together with milk. The spice blend varies by region and by chaiwala (chai vendor), so no two chais are exactly alike.
South Indian filter coffee (kaapi) is made by adding chicory to a blend of Arabica and Robusta, brewing a rich decoction through a metal filter, and finishing it with hot milk and sugar. It carries notes of chocolate, nuts, and fruit, and has a straightforward strength distinct from chai.
One cup (240ml) of chai contains 30-50mg of caffeine, compared with 95-120mg for coffee, roughly two to three times as much. This difference is an important consideration for Japanese beverage makers when designing products (source: Juste1Cafe).
Chai is a symbol of Indian hospitality. Serving chai to a guest is a matter of courtesy, and it is offered everywhere, from railway platforms to street stalls. It plays the role of a communication tool, indispensable to family gatherings and conversations among friends.
South India's coffee culture began around the 17th century and is deeply rooted in Karnataka and Tamil Nadu. Bengaluru has in recent years become a hub for Third Wave Coffee, founded there in 2016, and the city that Blue Tokai, founded in Delhi in 2013, treats as its main market — the center of specialty coffee, where third-wave coffee culture is spreading fast, led by young people in the cities (source: Perfect Daily Grind).
Traditional chai is made by putting water and milk in a pot and adding black tea leaves and spices to simmer. Rather than simply steeping the tea leaves, simmering it over low heat for several minutes draws out the full flavor of the spices.
Finely ground coffee (blended with chicory) is set in a dedicated two-tier stainless steel filter, and hot water is poured over it to brew slowly over 15 to 20 minutes. The traditional method is to combine the resulting rich decoction with milk, frothing it by pouring back and forth between a brass tumbler and dabara (saucer).
India's coffee market is expected to double in size by 2030, with specialty coffee projected to drive about 18% of that growth. Japanese matcha and hojicha adapted to fit chai culture, or ramen shops offering their own original chai are among the new ideas made possible by fusing Japanese and Indian drink cultures.
middle-class The expansion of the middle class, and Health consciousness is rising, increasing demand for chai and coffee as low-sugar, functional beverages.
Chai is a national drink consumed multiple times a day across North India, while coffee is a beverage that developed mainly in South India. Each has formed its own distinct cultural sphere. Understanding this north-south regional difference is essential when considering F&B expansion.
Chai is characterized by a complex flavor in which spices such as cinnamon, ginger, and cardamom blend with black tea and milk. South Indian filter coffee is a rich decoction made from a blend of Arabica and Robusta with chicory added, giving it a bold, robust taste.
Coffee is generally said to contain more caffeine than chai. This difference is a consideration for beverage makers when designing products, and it can also be kept in mind when approaching consumers looking for lower-caffeine options.
Chai is made by adding black tea leaves and spices to a pot of water and milk and simmering it over low heat to draw out the flavor. South Indian-style filter coffee is made by setting finely ground coffee in a two-tier filter, pouring hot water over it to brew slowly, and combining the resulting concentrate with milk.
India's coffee market is expected to expand significantly going forward, with specialty coffee projected to drive that growth. Demand for chai and coffee as low-sugar, functional beverages is also increasing amid the expansion of the middle class and rising health consciousness.
Rather than choosing one or the other, the key to success is understanding both cultures and choosing based on the target region and consumer segment. Ideas that fuse Japanese and Indian drink cultures are also possible, such as matcha or hojicha adapted in a chai style, or restaurants offering their own original chai. Assess the beverage culture of the area where you plan to open, and reflect it in your product design.
India's coffee and chai each have their own distinct appeal in flavor, culture, and how they are prepared and enjoyed. When Japanese companies enter India's F&B market, the key to success is developing a strategy suited to the target region and consumer segment, based on a deep understanding of both cultures. localization Always keep this north-south perspective in mind.
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