"The licensing deal will imply that Tips will hold the rights to the manufacture and marketing of Warner's catalogue in India over a three year period" said sources. While Tips was initially hopeful of a joint venture with Warner, this licensing deal rules out that possibility. Tips officials when contacted said they neither confirm nor deny the development. The licensing deal with Warner will mark Tips' entry into the international music category. In time, sources say, Warner may also pick up a stake in Tips. According to them, Warner had been in talks with most major players in the Indian music market. The decision on a tie-up was delayed since Warner was looking at a global merger with EMI. "Once the merger talks fell through, Warner had also contemplated entering the Indian market on its own" they explained. Tips is believed to have created a new business division for this project with Warner. This division, it is learnt, will be independent of the existing Hindi catalogue where Tips has a strongpresence. On the issue of manufacturing, Tips already has an audio cassette manufacturing plant in Silvassa. This plant is expected to commence the manufacture of compact discs (CDs) next year. "During the first year, Tips will have to outsource CDs" they point out.