Coca-Cola may be granted permission by the Indian government's Deparment of Economic Affairs to retain 100% ownership of its Indian subsidiary. Under the terms of its original agreement with the government Coca-Cola would have to divest 49% of the equity in the company to Indian investors.

Coca-Cola set up its wholly-owned Indian unit in 1997 when it was granted government permission to buy out its Indian bottlers. Its investment totalled some US$700m. But it undertook to make a public offering for 49% of the equity within five years.

Coca-Cola made its first request for this to be waived in October but this was rejected by India's Foreign Investment Promotion Board. However, reports suggest that it might be possible for Coca-Cola to retain its 100% ownership.

"The company's agreement with the government predates the policy on foreign direct investment in the food processing sector," an unnamed department official was quoted as saying. "The government has now allowed 100% FDI in the sector."