Microsoft needs to do more to crack the consumer market in developing countries, with piracy and affordability holding back sales in regions ranging from Asia and eastern Europe to Latin America, its chief executive told the FT.

Steve Ballmer said the group had launched initiatives such as XP StarterEdition, a Windows software package with reduced features, and Flexgo, a pay-as-you-go PC, but these had not yet signficantly penetrated the middle-income markets in countries such as India and China.

"On a per-cent basis, it [emerging markets] is the most rapidly growing part of our business but it’s still a relatively small percentage. We have two issues: number one is where are the PCs and number two is piracy rates are also high in so-called emerging markets,” Mr Ballmer said in an interview in Mumbai.

Microsoft declined to provide a breakdown of its revenue by region or product. But Mr Ballmer, in Mumbai on a three-day visit to India, said emerging markets globally accounted for roughly 20 per cent of its total business, excluding software sales to hardware vendors, Xbox and other revenue streams such as advertising.

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