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Richard Branson, British billionaire and chairman of the Virgin Group, has criticised India for not making foreign business welcome, saying it was one of the world's most closely protected countries.
India has been opening its markets to foreign firms since the early 1990s but still keeps tight restrictions on foreign direct investment in areas like retail, insurance and banking, and caps foreign participation in telecommunications at 74 per cent.
"You feel as a business person quite unwelcome in trying to bring your money to India and trying to make a difference in India," Branson told Times Now television.
"I can't open retail shops in India, I can't open a domestic airline in India, I can't have a radio station branded Virgin in India ... " he said.
"So I think if the governments can be brave and get rid of these laws, the Indian economy will grow even quicker and the Indian consumer will benefit enormously."
Vodafone, the UK mobile phone service provider, bought a controlling stake in one of India's leading mobile phone operators this year, and chief executive Arun Sarin said afterwards the deal had faced unexpected and last-minute hurdles.
India's tax department says the US$11.1 billion ($14.7 billion) deal is liable for tax and is billing Vodafone for an estimated US$2 billion. Vodafone says it doesn't think there is tax to be paid and that capital gains tax is usually paid by the seller, not the buyer.
Retail has also attracted foreign interest but the Government's communist allies oppose lifting investment limits.
India is keen to tap foreign money to help modernise its infrastructure but it recently imposed curbs on some portfolio investment, with record inflows pushing the rupee up against the dollar and complicating monetary policy management.
"India is one of the most closely protected countries in the world," Branson said, adding he spent years trying to persuade different governments to let Virgin fly to Mumbai and New Delhi. It now operates flights to London from India.
"If I am not allowed to open retail stores in India, if I'm not allowed to open an airline in India, if I'm not allowed to do all these things, then obviously we will take our money elsewhere," he said.
But he was still keen to invest in Asia's third-largest economy, and earlier told reporters he had found an Indian telecoms partner and wanted to enter the domestic airline market.
India is the world's fastest-growing telecoms market and has received applications from 46 domestic and foreign firms to launch mobile services.
"We have a partner now, and I will reveal all in two months' time," Branson said.
Because of the investment cap, foreign firms need a local partner to offer telecom services in India. Southeast Asia's top phone firm, Singapore's SingTel , has a 30.8 per cent stake in market leader Bharti Airtel Ltd .
Branson said he was waiting for India to relax its airlines policy, which prohibits foreign players from investing in the domestic sector.
"We'd love the right to fly domestic in India, but the market is currently protected. If the market opened up, you will find Virgin competing alongside local carriers," he said.
Domestic airline passenger traffic grew 36.7 per cent in the first nine months of 2007 from a year earlier. Domestic airlines have posted losses due to heavy initial investments and competition on fares.
- Reuters
