Pearson, the publisher of the Financial Times, is to found a business paper in India as part of a joint venture with one of the country's fastest-growing media houses.

Pearson recently forged a partnership with Network 18, the broadcaster, after severing the London-based FT's 15-year relationship with the Business Standard by selling its 13.85 per cent stake in the Indian paper.

Network 18's assets include the Indian version of CNBC, the business news television channel.

The FT and Network 18 are working on a new joint publication that will be aimed at India's increasingly affluent and investment-savvy middle class.

"There is a demand for accurate and honest business reporting," a source said.

The new publication will not be an Indian edition of the FT, but a new title that will follow a similar model to Mint, the business daily produced by a tie-up between The Wall Street Journal and the Hindustan Times.

Mint carries stories from both the Journal and the Hindustan Times and has its own staff in Delhi and Bombay.

Pearson's deal with Business Standard, started in 2003, was the first equity partnership between an Indian and a foreign news publishing company.

Western media groups have since displayed an eagerness to tap the Indian newspaper market but face challenges including protectionist legislation, rock-bottom pricing and a host of competitors.

Under Indian law, the maximum equity stake a foreign partner can have in a newspaper is 26 per cent.

At least five English-language business news dailies compete and most papers are virtually given away to readers, who pay only a few pence.

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