India unwelcoming to investors, says Virgin's Branson

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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 percent.

"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," Branson said.

Vodafone Plc, 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 $11.1 billion deal is liable for tax and is billing Vodafone for an estimated $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.

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