New Delhi, Aug. 2 -- Indian cafe chains are betting on premium beverages to drive growth in an otherwise sluggish quick-service restaurant market.

That bet is becoming more expensive. A global supply squeeze is driving up the cost of imported ingredients such as matcha, hojicha and yuzu, with most operators absorbing higher costs rather than raise prices.

The sharpest squeeze is in matcha. Global wholesale prices have climbed 30-75% over the past year as demand has outpaced supply from Japan. Importers are paying up to 75% more for premium ceremonial-grade matcha, while lower grades are up 30-50% amid poor harvests, labour shortages, limited production of tencha-the tea leaves used to make matcha-and higher freight costs, according to i...