Dalian, China: India’s buoyant growth has attracted international attention but multinationals wanting to enter the retail sector are “frustrated” by local laws which limit the ownership of foreign companies to 51%, a leading accounting firm said here today.
In a report for the World Economic Forum (WEF), PricewaterhouseCoopers has pointed out that many of India’s successes have taken place in urban hotspots while the rural areas have lagged behind.
India faces constraints, many of which multinationals are just beginning to experience first hand, it said.
“India has liberalised sectors such a retailing at a controlled pace. Foreign companies can own only 51% of single-brand shops or can become wholesalers frustrating the efforts of international players to gain a foothold in the country,” the report released at the Inaugural Annual Meeting of the New Champions here in the northeastern Chinese port city.
And many of India’s successes have taken place in “urban hotspots” like Bangalore and Mumbai while the countryside has lagged behind, it noted.
Despite the remarkable success of India’s service sector revolution, agriculture still employs 60% of the workforce. To make matters worse, the overcrowded cities have become world famous for traffic tie-ups and other infrastructure short-falls, it said.