Cobra Beer is set to capitalise on the emerging Indian beer market, after buying a brewery in the north east of the country.

The UK-based company has bought 76 per cent of Iceberg Industries, which owns a brewery in India's Bihar state. The move gives Cobra a better chance to challenge brewing industry heavyweights for a slice of India's growing beer market. Iceberg's brewery has a capacity of three million cases per year.

Chief executive, Adrian McKeon said Cobra wants 10 per cent of the Indian beer market by 2012.

The beer industry grew by 27 per cent in the last fiscal year and Cobra is not the only brewer to have noticed this.

SABMiller intends to spend $100m £48.6m) annually over the next four years in the country.

Nigel Fairbrass, SAB spokesperson, said: "What everyone is talking about is the potential. If you strip out those people who don't drink because of religious reasons, there's still a potential market size of around 500m people."