Luxury Brands Eye Indian Market, Navigate Complex Challenges
French retailer Galeries Lafayette opens its first Indian store in Mumbai, marking a bold move into a promising but complex market. Despite the challenges, the Indian luxury market is rapidly expanding and expected to triple by 2030.
Luxury BrandsIndian MarketGaleries LafayetteAditya Birla GroupLuxury MarketReal Estate MumbaiNov 16, 2025
Its splashy foray into the market is getting a local boost from the fashion arm of the Aditya Birla Group, a major Indian conglomerate. Luxury expert and Comite Colbert CEO Benedicte Epinay called the arrival of the iconic French department store 'an important step'.
India, with a population of 1.4 billion, offers what Epinay calls a 'promising market, but still a complicated one'. Brands must not only overcome high customs duties, a cumbersome bureaucracy, and infrastructure limitations, but also compete with a robust domestic luxury market. Of the 250 luxury and designer brands spread across Galeries Lafayette's 8,400 square metres (90,000 square feet) Mumbai space, almost all are foreign.
Industry professionals warn it's a bold gamble given the rich local clothing culture. 'I think a lot of brands like Louis Vuitton and Gucci and Dior have been doing a pretty good job at sort of weaving Indian design into their products,' Mumbai resident Sonal Ahuja, 39, told AFP. 'But at the end of the day if you want to buy something to wear to a wedding, you will buy (from Indian fashion designers) Sabyasachi or Tarun Tahiliani. Why would you want to buy something foreign that is trying to be Indian?' she added.
India's luxury market is still relatively small, but expanding rapidly. Valued at $11 billion in 2024, it is set to triple to $35 billion by 2030, according to Estelle David, South Asia Director at Business France. The economy creates tens of thousands of new millionaire households each year. These consumers increasingly splurge on everything from Lamborghini cars to Louis Vuitton bags.
'When a luxury house looks at a new country, it considers the number of wealthy people and the rise of a middle class,' Epinay said. 'India ticks all the boxes.' The reality is more complex. French luxury giants contacted by AFP declined to comment. Their silence, analysts suggest, reflects a lack of positive things to say about a market widely considered difficult.
'They have very little data to show they are making profits or generating a return on investment,' Ashok Som, from France's ESSEC Business School, said. In the early 2000s, the biggest fashion houses eyed India as their next growth engine after China. But a quarter-century later, the market remains tiny, said Epinay. According to Epinay, most brands have only one to three stores in India, compared with 100 to 400 in China.
In her view, the only real similarity between the two giants is 'the size of their populations'. India lacks China's 'social, linguistic, and territorial homogeneity,' Epinay added. India still has limited numbers of premium malls, most of which do not match what customers find in the Middle East, Europe, the United States, or China.
'India is not at the same stage of development, so it's very difficult to compare,' David said. High customs duties often push Indian consumers who can afford top-end to take a $350 round trip to Dubai where they can buy a French luxury handbag for up to 40 percent less than at home. Vishal Mathur, 46, an entrepreneur who works in his family's business in Mumbai, told AFP, 'one is willing to pay for craftsmanship, for style, for the brand.'
'But to say you should pay extra just to buy in India? No way.' India and the European Union have committed to finalising a free-trade agreement by the end of the year, which would bring 'fresh air to the market,' Epinay said. And profiting in India will require creative thought. Although major foreign ready-to-wear brands have outlets in megacities such as New Delhi, Mumbai, and tech-capital Bengaluru, Western fashion remains in the minority.
Many men wear the traditional knee-length kurtas for special occasions while flowing saris remain the most popular for women. Brands such as Louboutin, Dior, Chanel, and Bulgari are already collaborating with designers, labels, Bollywood stars, and local influencers, to appeal to local consumers, market specialists say. 'You have to adapt to the culture, to tastes and consumption habits,' David said.
Frequently Asked Questions
What challenges do luxury brands face in the Indian market?
Luxury brands face high customs duties, a cumbersome bureaucracy, infrastructure limitations, and strong competition from local luxury markets. They also need to adapt to local cultural and consumption habits.
How is the Indian luxury market expected to grow?
The Indian luxury market, valued at $11 billion in 2024, is expected to triple to $35 billion by 2030, driven by the increasing number of new millionaire households and growing consumer spending.
What is the role of local collaborations in the success of luxury brands in India?
Local collaborations with designers, labels, Bollywood stars, and influencers are crucial for luxury brands to adapt to Indian culture and consumer preferences, making their products more appealing to local buyers.
Why are high customs duties a significant barrier for luxury brands in India?
High customs duties make luxury products more expensive in India compared to other markets, often pushing consumers to buy these products from abroad, such as in Dubai, where they can find them at significantly lower prices.
What is the current state of premium malls in India compared to other markets?
India still has a limited number of premium malls that do not match the quality and variety found in other markets like the Middle East, Europe, the United States, or China, making it challenging for luxury brands to establish a strong presence.
Related News Articles
From Bengaluru to Pune: A Tech Entrepreneur's Heartfelt Goodbye
Tech entrepreneur Ujjawal Asthana, after 14 years in Bengaluru, shares his emotional farewell to the city, reflecting on the personal and professional growth it brought him. He's now set to embark on a new journey in Pune, where he's actively hiring for k
RERA Slaps Rs 5 Crore Fine on Vatika Ltd for Violating Real Estate Regulations
The Real Estate Regulatory Authority (RERA) has imposed a hefty penalty of Rs 5 crore on Vatika Limited for failing to register its residential project with the authority within the stipulated timeframe.
Eastern Pune's Real Estate Market Thrives with Metro Phase 2 Development
Pune's Metro Phase 2 is reshaping the real estate landscape, driving up property values in previously underdeveloped areas such as Kharadi, Viman Nagar, and other eastern suburbs.