India's Rising Role in the Global Luxury Market
Dr Vidhu Sekhar P, Assistant Professor, Department of Fashion Management Studies, National Institute of Fashion Technology, Ministry of Textiles, Daman campus
Abstract
India, which will have the largest population in the world by 2025, is experiencing a revolution in luxury. Previously regarded as a future market, it has become a crucial source of expansion for major international fashion companies. This article examines how policy changes, technological advancements, changing consumer psychology, and economic growth are all influencing major luxury brands like Galeries Lafayette, Valentino, and Balenciaga to make significant investments in India.
In the context of Indian retail, it also critically analyses the difficulties in breaking into new markets and the significance of omnichannel interaction, strategic localization, and long-term brand positioning. To comprehend how fashion management is changing in this dynamic new environment, the study consults recent reports, news coverage, and industry insights.
Keywords
Luxury fashion, fashion management, Indian market, global retail strategy, brand localization, strategic partnerships, experiential retailing, Gen Z consumers, market expansion, omnichannel.
Introduction
These days, luxury isn't limited to Shanghai, Paris, Milan, or New York. By 2025, Delhi and Mumbai will have been added to the global narrative as new fashion investment hotspots. India's transition from an aspirational luxury market to a top travel destination is not a coincidence; rather, it is the consequence of rising cultural confidence, technological readiness, and demographic advantage.
In addition to entering India, well-known brands like Valentino and Balenciaga are now making investments in ingrained retail infrastructure and marketing tactics targeted at the Indian consumer base (Business of Fashion, 2023). Fashion management professionals working in a post-globalized, digitally integrated, and culturally diverse world can learn a lot from this article, which examines the many factors that have led to India's rise as the next battleground for luxury.
India's Economic Context: Fertile Ground for Luxury
Among emerging markets, India's economy is currently undergoing one of the most robust post-pandemic recoveries. According to the World Bank (2024), the country's GDP is predicted to grow by 6.8% in 2025, making it the third-largest consumer market in the world by 2030 (McKinsey, 2024). By 2027, it is anticipated that there will be 500 million middle-class Indians, opening up a huge new market for those seeking luxury (Bain & Company, 2023).
Additionally, as the number of HNWIs and UHNIs rises, the wealth pyramid is changing. More than 1,200 new millionaires were created in India each month in 2024, according to Credit Suisse (2023), indicating strong growth at the top of the pyramid. This rare combination of wealth creation and macroeconomic stability gives luxury brands both volume and value.
The Indian Luxury Consumer: Psychology and Preferences
Indian luxury consumers today are characterized by their mindset rather than just their income. Millennials and Gen Z comprise almost 70% of India's population. They are digitally active, globally conscious, and look for brands that reflect who they are rather than just convey status (McKinsey, 2024). In addition to demanding individualized experiences, ethical values, and digital convenience, the aspirational middle class is moving from premium to luxury goods.
For Indian consumers, luxury is becoming more and more entwined with emotional storytelling and cultural relevance. A Gucci handbag must now appeal to local aesthetics in addition to European craftsmanship, whether through colour schemes, advertising narratives, or partnerships with Indian celebrities.
Strategic Entry: Why Partnerships Matter
Local partnerships are essential in India due to its complicated regulatory framework, retail FDI restrictions, and fragmented consumer segments, in contrast to China, which permits direct market access. Businesses such as ABFRL and Reliance Brands Ltd. serve as logistical, cultural, and regulatory bridges for foreign competitors.
For example, Balenciaga and Reliance's collaboration provides deep insights into Indian fashion behaviour in addition to retail space in upscale locations (Vogue Business, 2022). In order to ensure operational scalability without sacrificing brand identity, Valentino has partnered with ABFRL, which reflects a hybrid model of local distribution with global control (Business Standard, 2022).
Further enhancing these collaborations beyond retail growth, Indian conglomerates are now co-investing in luxury tech innovation and customer relationship management (CRM) platforms.
Retail Infrastructure: More Than Just Flagships
The infrastructure for luxury retail in India is rapidly diversifying. Luxury brands can be found wherever customers travel, shop, and mingle, from high-end malls like Phoenix Palladium to airport boutiques at the Mumbai and Delhi T3 terminals. The transition from static flagship stores to dynamic experience zones is more important.
The goal of Galeries Lafayette, which is scheduled to open by 2025, is to establish a lifestyle ecosystem centered around luxury by providing art galleries, café lounges, trunk shows, and multi-brand offerings in addition to acting as cultural hubs (Financial Express, 2023).
This change is in line with consumer preferences: according to CBRE (2023), 74% of Indian luxury consumers favour brands that provide carefully chosen, immersive retail experiences over traditional product-only stores.
The Power of Localization and Cultural Integration
India's cultural diversity is a key characteristic of its luxury market. Here, brands that uphold international renown while honouring regional customs thrive. Consider Dior's pre-fall 2023 show in Mumbai, which was widely broadcast and featured both international silhouettes and Indian artisans and embroiderers (Vogue India, 2023).
Consider Gucci's 2024 Diwali campaign, which featured Bollywood stars and combined festive Indian design sensibilities with Italian elegance. These localized brand-building techniques, which integrate luxury labels into Indian cultural consciousness, go beyond simple marketing techniques.
Digital Ecosystem and Omnichannel Strategy
India's luxury consumers are mobile-first and tech-savvy. More than 830 million Indians have internet access as of 2025, and 75% of them shop on smartphones (TRAI, 2024). The new omnichannel normal includes social commerce, live-streamed fashion shows, personal shopping via WhatsApp, and virtual try-ons driven by artificial intelligence.
Global brands are now able to reach consumers in Tier 2 and Tier 3 cities that have historically been shut out of luxury retail, thanks to the rapid expansion of luxury e-commerce platforms like Tata CLiQ Luxury and Ajio Luxe.
Furthermore, influencer partnerships, data-driven personalization, and digital CRM systems have become the cornerstones of luxury brand management in India, providing a physical solution to a geographically and culturally heterogeneous audience.
Operational and Management Challenges
There are challenges in the Indian luxury market despite the enormous opportunities.
According to the Retailers Association of India (2024), import duties, which range from 30 to 50%, keep prices high and promote buying from black markets or international travel.
High real estate prices lower profitability in desirable locations like Mumbai's BKC or Delhi's Emporio.
Last-mile luxury delivery is difficult because of ongoing logistics and warehousing issues outside of major cities.
Lastly, the quality of the customer experience is impacted by the lack of talent in luxury retail, particularly at the store level (stylists, consultants, and visual merchandisers).
Fashion managers must thus strike a balance between cost-effectiveness and brand integrity, global standards and local expectations, and exclusivity and accessibility.
Conclusion
India is at the forefront of the luxury playbook in 2025 rather than being on the sidelines. India is a market that is uniquely positioned for international luxury brands due to the combination of economic growth, cultural fluidity, youthful aspiration, and digital innovation. Fashion managers face the challenge of how to enter India in a meaningful, sustainable, and strategic way rather than whether to do so at all. Luxury success in India will be determined by a brand's story, experience, and level of connection with its customers rather than just volume. India is a masterclass in the future of global luxury for fashion management professionals, not just a market.
References
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
India.com
2 minutes ago
- India.com
What will be price of petrol, diesel if India stops importing oil from Russia? Prices of petrol, diesel will reach…,Indian customers will have to pay…
India-Russia relations- File image New Delhi: In a significant update amid the trade talks between India and the US and Donald Trump imposing an additional 25% tariff on India, taking the total tariff to 50% due to India's continued crude oil purchase from Russia, reports are now talking about the inflationary impact if India stops buying oil from Russia. Notably, Russia become India's largest oil supplier since the Russia-Ukraine war and is currently supplying 35% to 40% of India's oil needs. Why Donald Trump imposed tariffs on India? In a massive action against India, the United States, under the leadership of Donald Trump imposed tariffs on India as India continued to purchase crude oil from Russia. In response to the move, India clarified its stand and said that it buys Russian oil because Europe stopped sourcing from Moscow. How much loss will India face if Russia cuts imports? As per experts, if India cuts Russian import of crude oil to India, India will have to rely more on costlier oil from West Asia, Africa, the US, and Latin America, which will pose technical, economic, and strategic challenges. More notably, the shifting could raise annual costs by Rs 25,000–40,000 crore for Indian refiners, which would ultimately hit the budgets of Indian consumers. Earlier, a SBI report has also indicated that the fuel bill might increase by USD 9 billion in FY26 and USD 11.7 billion in FY27 if Russia cuts its crude oil imports to India. US President Trump on whether US will impose additional 25 pc tariffs on India? In a significant statement and a matter of good news for India, US President Trump said the US may not impose secondary tariffs on countries continuing to buying Russian crude oil. Speaking to Fox News aboard Air Force One en route to Alaska, he said that, 'Well, he (Vladimir Putin) lost an oil client, so to speak, which is India, which was doing about 40 per cent of the oil. China, as you know, is doing a lot…'. (With inputs from agencies)
The Hindu
2 minutes ago
- The Hindu
Chinese Foreign Minister Wang Yi to meet PM Modi during 2-day India visit
Chinese Foreign Minister Wang Yi will meet Prime Minister Narendra Modi during his two-day visit to India beginning Monday (August 18, 2025), according to the Ministry of External Affairs (MEA). The meeting, to be held on Tuesday (August 19, 2025), assumes significance as it is taking place days before Mr. Modi's planned trip to China to attend the annual summit of the Shanghai Cooperation Organisation (SCO). Before calling on the Prime Minister, Mr. Wang will hold separate talks with External Affairs Minister S. Jaishankar and National Security Advisor Ajit Doval that could see both sides deliberate on a range of key issues including border situation, trade and resumption of flight services. The Chinese Foreign Minister's visit is largely seen as part of ongoing efforts by the two neighbours to rebuild their relationship after it came under severe strain following the deadly Galwan Valley clashes in 2020. The two sides are expected to discuss new confidence-building measures for durable peace and tranquillity along their contested border during Mr. Wang's visit, people familiar with the matter said on Sunday (August 17, 2025). Mr. Wang's trip is also seen as important as it comes amid increasing tensions in India-US relations following President Donald Trump doubling tariffs on Indian goods to 50% that included an additional penalty of 25% for purchasing Russian crude oil. According to details released by the MEA, the Chinese Foreign Minister will land in New Delhi at around 4:15 p.m. on Monday (August 18, 2025). He will meet Jaishankar for bilateral talks at around 6 p.m. Mr. Wang and NSA Doval are scheduled to hold a new edition of Special Representatives (SR) dialogue on the boundary question at 11 a.m. on Tuesday (August 19, 2025). According to the MEA, Mr. Wang will call on PM Modi at his 7 Lok Kalyan Marg residence at 5:30 p.m. on Tuesday (August 19, 2025). The Chinese Foreign Minister will be in India primarily to hold the 24th round of SR dialogue with NSA Doval. Mr. Wang and Mr. Doval are the designated special representatives for the boundary talks. Both sides are expected to deliberate on new confidence-building measures besides reviewing the overall situation along the Line of Actual Control (LAC), the people cited above said. Though the two sides disengaged troops from the friction points, they are yet to de-escalate the situation by pulling back the frontline forces from the border. Each side currently has around 50,000 to 60,000 troops along the LAC in the eastern Ladakh region. The Chinese Foreign Minister will also meet External Affairs Minister Jaishankar. It is learnt that the two sides will also use the opportunity to lay the ground for Prime Minister Modi's visit to China to attend the annual summit of the SCO to be held on August 31 and September 1. As per the plan, the Prime Minister will embark on a visit to Japan around August 29 and after concluding the trip, he will travel to the northern Chinese city of Tianjin for the SCO summit. PM Modi's visit to China is being planned amid efforts by the two sides to repair their bilateral ties which came under severe strain following the deadly clashes between Indian and Chinese troops in Galwan Valley in June 2020. NSA Doval travelled to China in December last and held the SR talks with Mr. Wang, weeks after Prime Minister Modi and Chinese President Xi Jinping decided to revive various dialogue mechanisms between the two sides at a meeting in the Russian city of Kazan. The military standoff in eastern Ladakh began in May 2020 and the clashes at the Galwan Valley in June that year resulted in a severe strain in bilateral ties. The face-off effectively ended following completion of the disengagement process from the last two friction points of Demchok and Depsang under an agreement finalised on October 21 last year. The decision to revive various dialogue mechanisms was taken at a meeting between Prime Minister Modi and Chinese President Xi in Kazan on October 23, 2024. The Modi-Xi meeting came two days after India and China firmed up a disengagement pact for Depsang and Demchok. The two sides also initiated a number of initiatives to rebuild the ties that included resumption of Kailash Mansarovar Yatra and New Delhi restarting issuance of tourist visas to Chinese nationals. Both sides are also discussing modalities to resume direct flight services between the two countries. The flight services between the two sides were suspended following the COVID-19 pandemic in 2020. It was not restored in view of the border row. Defence Minister Rajnath Singh and External Affairs Minister Jaishankar visited China in the last two months to attend SCO meetings. China is the current chair of the SCO.
Mint
2 minutes ago
- Mint
States to ease off-budget borrowings amid fiscal discipline push
New Delhi: After a year of sharp increases, Indian states are expected to keep their off-budget borrowings largely flat in FY26, signaling a shift toward tighter fiscal discipline even amid persisting pressures for welfare spending, according to two people familiar with the matter. The restraint comes after years of heavy reliance on off-budget borrowings, which had ballooned during the pandemic with both the Centre and states scrambling to finance emergency spendings. Off-budget borrowings by states rose to ₹ 29,335 crore in FY25 from ₹ 21,251 crore the year before, finance ministry data shows. In FY21, at the height of covid-related spending, such borrowings had touched ₹ 67,181 crore. 'States have been told to enforce fiscal discipline. Even access to the Centre's 50-year, interest-free loans, which are popular among states, comes with conditions requiring greater financial prudence,' said the first person mentioned above, on the condition of anonymity. Many states, the person said, are increasingly turning to the Centre's Special Assistance to States for Capital Investment (SASCI) scheme, which provides long-term, interest-free loans for infrastructure projects, rather than relying on off-budget borrowing mechanisms. Off-budget borrowings by states are likely to slow down in FY26, the person added. On its part, the Centre had itself discontinued off-budget borrowings in FY23. Since FY22, it has tightened rules for states by counting debt raised through state-owned entities, where repayment is backed by state budgets, taxes, or other revenues, toward their overall borrowing limits under Article 293(3) of the Constitution. 'States are realizing that excessive off-budget borrowing undermines fiscal credibility. By reining it in, they not only improve transparency and discipline but also preserve space for future borrowing at lower costs,' said the second person mentioned above. 'Curbing off-budget borrowings also reassures investors and credit agencies that states are serious about managing debt sustainably,' the person added. There was no response to queries emailed to a finance ministry spokesperson. A recent report by CareEdge Ratings noted that the budgets of 13 major states, representing 83% of India's GDP, project an aggregate fiscal deficit of 3.2% of GDP in FY26, broadly in line with the previous fiscal year. The report also highlighted sharp differences in states' financial resilience: richer states such as Haryana, Telangana, Karnataka, Tamil Nadu, and Maharashtra finance more than three-fourths of their budgets through their own revenues, while states including Madhya Pradesh, West Bengal, and Uttar Pradesh rely heavily on central transfers. In FY25, Maharashtra topped the list of states relying on off-budget borrowings at ₹ 13,990 crore, followed by Karnataka ( ₹ 5,438 crore), Telangana ( ₹ 2,697 crore), and Kerala ( ₹ 983 crore), according to finance ministry data. In FY24, Maharashtra had raised ₹ 7,700 crore through off-budget borrowings, followed by Kerala ( ₹ 4,688 crore), Telangana ( ₹ 2,546 crore), Punjab ( ₹ 1,675 crore), Tamil Nadu ( ₹ 1,560 crore), and Assam ( ₹ 1,102 crore). States often turn to off-budget borrowings to fund welfare schemes and infrastructure without breaching deficit targets or borrowing caps. While this offers short-term flexibility, high borrowings raise concerns over transparency and fiscal discipline. Keeping such borrowings in check will ease debt pressures and help ensure that India's broader consolidation roadmap stays credible. States have been increasing their open market borrowings over the past five years. According to finance ministry data, Maharashtra and Tamil Nadu lead the pack, each breaching the ₹ 1.2 lakh crore mark in FY25, underlining the scale of state-level investment and spending priorities. Karnataka and Uttar Pradesh have also recorded substantial increases. Smaller states, including those in the northeast, have maintained modest borrowing profiles.
