Home ／ Insights on entering the Indian market
2026.03.24
Known as the land of chai, India India is in fact also among the world's top ten coffee-producing countries. Indian coffee's history dates back to the 17th century; according to legend, it began when the saint Baba Budan brought coffee beans from Yemen and planted them in the Chikmagalur region of Karnataka in South India.
Since then, coffee cultivation has developed mainly in South India, and Karnataka, Kerala, and Tamil Nadu remain the main growing regions today. India is the world's sixth-largest coffee producer, growing about 350,000 tons a year.
Chennai In cities across South India, including Bengaluru, filter coffee known as "kaapi" is deeply woven into daily life. Brewed using brass or stainless steel filter equipment and mixed with warmed milk while frothing it back and forth, this distinctive method of preparation is emblematic of a South Indian morning.
In North India, by contrast, chai is overwhelmingly dominant, and this north-south regional difference between coffee and chai is a key factor directly shaping strategy for beverage businesses.
Entering the 2020s, India's coffee market has entered its "third wave."Blue Tokai Coffee Roasters, Third Wave Coffee, along with boutique brands such as Subko, are offering a new coffee experience that emphasizes single-origin beans, artisanal brewing, and traceability.
Third Wave Coffee expanded to more than 165 outlets across 12 cities by July 2025, surpassing its FY25 target of 150 outlets. specialty coffee The market is projected to reach 6.28 billion dollars by 2030 (a CAGR of 13.6%).
India's branded cafe market is expected to reach more than 6,110 outlets in 2026, and to exceed 10,000 outlets by 2030 (a CAGR of 13.2%). The main players today are as follows.
Tata Starbucks leads with 479 stores at the end of FY25, followed by Barista with 465 stores. Cafe Coffee Day (CCD) has shrunk to about 435 stores. Meanwhile, Tim Hortons has expanded to more than 40 stores since entering India in 2022, and Coffee Island has grown to around 20 stores.
The history of Indian coffee dates back to the 17th century. It is said to have begun when the saint Baba Budan brought coffee beans from Yemen and planted them in the Chikmagalur region of Karnataka in South India. Since then, cultivation has developed mainly in South India.
In cities across South India such as Chennai and Bengaluru, filter coffee known as kaapi is deeply woven into daily life. It is brewed using a metal filter and mixed with warmed milk while frothing, a distinctive method of preparation that is a familiar scene of the South Indian morning.
In recent years, boutique brands offering a new coffee experience centered on single-origin beans, artisanal brewing, and traceability have been on the rise. Specialty shops are expanding, mainly in urban areas.
India's branded cafe market is projected to keep growing its outlet count going forward. Major players expanding in the space include Tata Starbucks, Barista, and Cafe Coffee Day.
Japan's coffee shop culture, characterized by careful hand-drip brewing and a quiet atmosphere, offers a point of differentiation that resonates with third-wave consumers. Exporting Japanese-made coffee equipment and offering matcha menus alongside coffee cafes also hold promise.
Bengaluru's tech hub districts have the deepest penetration of third-wave culture, making them strong candidate locations. Because rising disposable income in urban areas is driving spending on premium coffee experiences, we recommend considering site selection where the target demographic gathers, along with concept design, from the earliest stages.
As India's middle-income households is projected to reach about 61% of the population by 2047, and rising disposable income in urban areas is driving spending on premium coffee experiences.
Japanese-style coffee shops and cafes: Japan's coffee shop culture, with its careful hand-drip brewing, quiet atmosphere, and thoughtfully paired food, is a point of differentiation that resonates with India's third-wave coffee consumers.
Exporting coffee equipment: Japanese-made coffee equipment from brands such as Hario and Kalita is held in high regard among India's specialty coffee enthusiasts.
matcha Cafe expansion: Offering a matcha menu alongside a coffee cafe is effective both for differentiation and for attracting new customers.
Bengaluru's tech hub districts have the deepest penetration of third-wave culture, making them the strongest candidate for Japanese cafes to open.
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