By Agence France-Presse
Starbucks, which entered the vast Indian market in 2012 and now has 125 outlets, began legal proceedings against "SardarBuksh", which has 25 shops in New Delhi, in July.
"Our name rhymed with Starbucks which is why the court has ruled (on Thursday) in their favour," Sanmeet Singh Kalra, co-founder of SardarBuksh, told AFP.
His company has agreed to change the name to the not-particularly-different "Sardarji-Bakhsh" within two months.
But Kalra said that his logo, which like Starbuck's is a circle of green and black with a figure at the centre -- albeit a man in a turban and not a mermaid -- will not change.
Harish Bijoor, a branding consultant, said that Indian firms often use names that are similar to well-known multinational brands.
"Such imitators have limited ambition and they enjoy their moment of limelight of having ambushed an iconic brand in India," Bijoor told AFP.
In 2015, US fast food giant Burger King reportedly took a street vendor in the northern city of Ludhiana to court for using the name "Mr Singh Burger King".
Indian chain "Burger Singh" has been left alone, however, opening 20 outlets in India with plans to expand into the British market, according to media reports.
"Singh" is a commonly used last name in India's Hindu and Sikh communities.