A compliance crackdown has prevented Wal-Mart from reaching expansion targets in India, according to Asian News International (ANI).
The US-based company had set its sights on becoming India's top retailer by 2015.
However, ANI has reported Wal-Mart opened just five wholesale stores in the country last year, well below the 22 planned.
ANI has pointed to the company’s ongoing internal inquiry as a major reason behind the shortfall.
In November, Wal-Mart revealed it was investigating possible violations of the US Foreign Corrupt Practices Act, an anti-bribery law, in India, Mexico and other countries.
While the company is yet to be charged, it has increased efforts to keep partners and employees in line with US and Indian laws, weighing heavily on productivity.
Despite the setback, Wal-Mart's international operations continue to drive its overall growth.
The company's sales rose 5 per cent in 2012, on the back of a 7.4 per cent rise in international sales.
Wal-Mart hopes to strengthen its foothold in India by opening a supermarket chain in the subcontinent within the next two years.
The Indian government approved foreign investment in supermarket retail in September 2012.
Wal-Mart has hired US lawyers to develop compliance procedures and train employees in India before the stores open.
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