By CIO Insider Team
 

Starbucks has signed an agreement with the Tamil Nadu government to establish a Global Capability Center (GCC) in Chennai, creating around 800 technology jobs as part of the company’s expansion in India.
The state government announced the development on Monday, although it did not disclose the investment amount associated with the proposed center. The GCC is expected to support Starbucks’ technology operations and strengthen its capabilities in areas requiring skilled technology professionals.

According to a state government press release, Starbucks Chief Technology Officer Anand Varadarajan said Chennai was selected for its strong talent pool; relatively lower employee turnover, and well-developed infrastructure, which support the company’s long-term technology requirements.

According to a report, technology centers by global companies such as Citi $AXP +0.65%, Barclays and American Express are already located here in Chennai, accounting for approximately 10% of India's global capability center base. The Starbucks announcement comes on the heels of an earlier deal inked by U.S. pharmacy giant Walgreens $WBA 0.00% which also plans to establish a global capability center in the state of Tamil Nadu.

The research companies Nasscom and Zinnov have estimated that India is now home to the most number of capability centers in the world with more than 2,100 capability centers employing close to 2.36 million people and contributing to revenue of close to $100 billion for the country.

The centers have grown far beyond simple administrative functions and are increasingly being used by businesses to accomplish more complex tasks, including software development, financial tasks and research and development, according to Reuters.

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Starbucks has a joint venture with Tata Consumer Products to run about 500 Starbucks cafes in India. The technology hub in Chennai is part of the company's growth in the country.

The Chennai move is a part of Starbucks' efforts to expand its growth strategy after saying that it had completed a company-wide turnaround in two years under the leadership of its CEO Brian Niccol.

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The chain is on the growth path again, as comparable store sales were up 7.9% worldwide in the fiscal third quarter, which ended on June 28, Brian said. The company has also reshaped its China market with a new joint venture with Boyu Capital with a long-term goal of increasing the number of stores there from 8,000 to as many as 20,000.