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India's growing wealthy population is driving demand for luxury brands, but expansion is being held back by a lack of high-quality retail space. The country currently has only a handful of luxury malls, making it difficult for global brands to scale their presence. While several new projects are planned across key cities, they are still a few years away from completion. In the meantime, brands are entering through franchise partnerships or operating in premium but non-luxury spaces. High import duties and limited infrastructure continue to shape how luxury retail evolves in India.
India's expanding economy and rising number of affluent consumers are increasing demand for luxury products, but limited availability of premium retail spaces is slowing the sector's growth. Despite a population of nearly 1.5 billion and an economy growing at over 6%, the country has very few high-end malls where global luxury brands prefer to operate. Advertisement
At present, India has only three established luxury malls DLF Emporio and The Chanakya in New Delhi, and Jio World Plaza in Mumbai. This limited supply has created a major constraint for international brands looking to enter or expand in the market.
Developers have acknowledged the issue. Saurabh Bharara from DLF stated that global luxury groups such as LVMH, Kering and Richemont have been actively seeking more retail space in India, with several brands ready to enter immediately if suitable space becomes available. However, there is currently no vacant capacity in existing luxury malls.
To address this, DLF is planning to expand Emporio, which will double its leasable area of 160,000 sq ft. The project is expected to be completed by the end of 2028. In addition, three more luxury malls are being planned in Mumbai, Hyderabad and Gurgaon, though these projects are likely to take a few years before becoming operational.
India's wealth profile is also changing. According to Knight Frank's Wealth Report 2025, the country now ranks fourth globally in terms of individuals with wealth above USD 100 million. At the same time, the middle class is growing steadily. However, the overall luxury goods market in India was valued at only about USD 12.1 billion last year, which remains a small fraction compared to China's market.
Industry executives have pointed out that the lack of quality retail infrastructure is the biggest challenge. R. Satyajit of Aditya Birla Fashion and Retail highlighted that premium real estate continues to be the key bottleneck. The company recently brought the French department store Galeries Lafayette to Mumbai, offering around 200 international brands a platform to enter India.
Some brands are adapting by opening stores in premium but non-luxury malls. For example, Golden Goose has launched three stores across New Delhi, Bengaluru and Mumbai over the past two years, targeting younger consumers.
However, several global brands still have limited or no presence in India. Patek Philippe and Loro Piana do not have physical stores in the country. Prada operates only one beauty outlet and no fashion stores, while Chanel has a limited network compared to its presence in China, where brands typically operate dozens of outlets.
The gap in retail infrastructure becomes more evident when compared globally. India has about 110 million sq ft of grade-A mall space, significantly lower than China's 400 million sq ft and the United States 700 million sq ft. High street retail is also not a preferred option for luxury brands due to concerns around cleanliness, congestion and overall experience.
To navigate these challenges, many brands are entering India through franchise partnerships with major conglomerates such as Reliance, Aditya Birla Group and Tata Group. These companies provide capital, retail networks and local expertise. Brands like Balenciaga, Tod's and Stella McCartney have already adopted this route, while Reliance's Jio World Plaza has helped expand the presence of brands like Louis Vuitton in Mumbai.
Developers, however, face their own challenges. Securing funding for luxury mall projects often depends on confirmed commitments from brands, but such commitments usually come only when projects are close to completion. This creates a delay in project execution.
In addition to infrastructure issues, high import duties ranging between 35% and 40% have historically pushed Indian consumers to shop in global hubs such as Paris, Dubai and Singapore. This continues to impact domestic luxury retail growth.
Some global brands are taking a cautious approach. Prada's leadership has indicated that while India is a key potential market, decisions on entry will take time due to the need for long-term planning, including multiple store rollouts and operational investments.
Source Reuters
5th Jun, 2025
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