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Swish Tea Cafes Chasing Riches Reinvent Poor Man's Chai in India

  • Tea startups say they are only "scratching the surface"
  • Coffee revolution that brought Starbucks driving change
A vendor prepares chai in Mumbai.

A vendor prepares chai in Mumbai.

Photographer: Dhiraj Singh/Bloomberg
Updated on

That sweet and milky tea concoction called chai is getting an image makeover in India. Driving the change is the other beverage -- coffee.

Rising incomes and demand for a refined experience transcending chai are spawning posh tea lounges in the nation’s biggest cities, a transformation mirroring 15 years of coffee revolution that brought Starbucks in 2012. Entrepreneurs are pooling their savings to set up these tea houses, inspired by the $175 million initial public offering planned by the parent of Cafe Coffee Day, a chain backed by KKR & Co.