The two companies have signed a nonbinding initial pact and hope to finalise definitive agreements over the next few months.
Tata Tea is one of the biggest tea companies in India but is now looking to branch out and become a more complete beverages company. Meanwhile, PepsiCo is looking to tap into emerging market growth and expand into fast growing niches such as healthy drinks.
PepsiCo entered India in 1989 and is now one of the biggest food and beverage businesses in the country.