NEW DELHI: India's luxury market is set to grow to USD 30 billion from USD 23.8 billion by the year-end on back of growing exposure of international brands amongst Indian youth and higher purchasing power of the upper class in tier II and III cities, Assocham said today.
The chamber pointed out that economic growth, leading to urbanisation and higher disposable incomes, has helped propel the growth of luxury goods.
Moreover, increasing retail presence of luxury players across the country and higher numbers of brands entering the country has resulted in a strong performance of luxury goods.
"Well-travelled consumers and a stable economy, coupled with a young population with growing disposable incomes, spell good news for luxury brands across the world.
With positive regulations and policies for the retail industry being put in place by the government, India is a market that can no longer be ignored by international brands," said the chamber.
However, lack of suitable infrastructure, high tax rates, rental costs and parallel growing market of counterfeits are some major problems that are a cause of concern for luxury players entering India.
"Thus, the Indian market represents a huge opportunity for the foreign luxury players, but it needs to fix the existing loopholes," Assocham said.
According to a study conducted by the chamber, Indian luxury market is poised to expand five-fold in next three years and the number of millionaires is expected to multiply three times in five years.