Law requiring foreign retailers to acquire products locally slows expansion; red tape, few labor laws

Updated Feb. 23, 2016 5:34 p.m. ET

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BHADOHI, India—Swedish retailer IKEA wants to sell its flat-pack dining tables, cotton dish towels and Scandinavian-sounding sofas to India’s blossoming middle class. Under Indian law, roughly one-third of those items must be made locally, and that is proving a formidable obstacle.

IKEA has scoured the country for new products that meet its standards and come up nearly empty-handed. Laminated table tops from Indian suppliers…

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