Sir Richard Branson, chairman of the Virgin Group, has hit out at business practice in India claiming it makes foreign investors “unwelcome” and is one of the world's most protectionist countries.

The British entrepreneur called on the Indian government to open its markets to full overseas competition for the benefit of the domestic consumer and to allow the economy to grow even faster.

India still has tight restrictions on foreign direct investment in sectors such as 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,” SIr Richard told the Times Now television channel.

“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. If I'm not allowed to do all these things, then obviously we will take our money elsewhere," he said."I think if the government can be brave and get rid of these laws, the Indian economy will grow even quicker and the Indian consumer will benefit enormously.”

No foreign company is allowed to operate or have a stake in an airline in India. The domestic market is led by Jet Airways, owned by a British resident Indian, and Kingfisher Airlines, owned by the Indian billionaire often compared with Sir Richard for his brand awareness. Vijay Mallya, chairman of UB Group, named his start up airline after his Kingfisher beer brand as a way around the ban on alcohol advertising.

Virgin said it would compete alongside India’s domestic carriers if there were no barriers to entry.

Instead, the UK company is expected to focus on the fast-growing telecoms sector by bidding for a mobile phone licence when the government awards the next batch of spectrum.

SIr Richard said he had found an Indian partner – as required by the rules – and would reveal details in two months. The joint venture is expected to be with Tata, the industrial conglomerate that owns Corus.

In radio, Virgin has a joint venture with HT Media, owner of the Hindustan Times but can't use the Virgin brand. Their FeVer 104FM has licences in Delhi, Bombay, Calcutta and Bangalore.

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