A Golden Era

Indians’ love affair with gold is well known. The yellow metal has surged in value, repaying the trust India has reposed in it for decades. As India’s luxury market matures, however, consumers are diversifying their holdings to premium products across categories. 

Passenger car manufacturers were among the first to recognise the premiumisation trend. Mercedes Benz and BMW are seeing record sales of their luxury models. Mercedes sold 17,400 cars in 2023, the most ever in India. BMW wasn’t far behind with sales of 14,172 cars. The move towards luxury SUVs has driven automotive companies like M&M, Maruti Suzuki and Hyundai to offer a greater number of premium SUVs than sedans. Nearly half of all passenger cars sold in India today are SUVs. 

Niche luxury cars like Porsche, Lamborghini and Ferrari are also recording unprecedented sales to a new generation of affluent buyers. According to trade sources, Lamborghini sold 103 cars, each priced between Rs 5-10 crore on-road, in calendar 2023. All existing stocks are sold out. Lamborghini can fulfil new orders only in 2026. 

India’s luxury market is expected to grow from USD17 billion (Rs 1,42,000 crore) in 2024-25 to USD 90 billion (Rs 7,56,000 crore) in 2029-30. Pallavi Sehgal, a product and strategy consultant, wrote that India’s luxury market currently “caters to a relatively small but highly influential segment of the population.” She added: “This group, characterised by high disposable incomes and sophisticated tastes, primarily includes new-age entrepreneurs, high networthindividuals, and the urban elite. Their consumption patterns are often focused on specific luxury segments such as high-end automobiles, premium watches, and branded jewellery, which are seen as both status symbols and smart investments.

“The beauty segment in India is witnessing a gradual shift towards luxury with premium brands beginning to gain traction among affluent consumers. The expansion strategies of international players like Sephora, in partnership with Reliance, highlight this trend. In the realm of fashion and accessories, the market is vibrant yet selective. While there is a growing appetite for high-end fashion among India's elite, the broader market still shows a preference for value-for-money and mid-range brands. This dichotomy illustrates the challenge of broadening the luxury appeal beyond the top tier of wealthy consumers.”

Travel too is witnessing premiumisation. Destinations like the Maldives where villas can cost upwards of Rs 1.5 lakh per night pioneered bespoke luxury holiday experiences for Indians. Now there are global alternatives. Britain’s The Times recently made a list of the world’s best luxury destinations. The list included the Caribbean island of St. Lucia, Hawai, the Costa Rica rainforest, Tahiti and for the more adventurous Antarctica. 

Affluent young Indians are willing to spend on experiential travel and special events. The recent frenzy over tickets for Coldplay’s planned concerts on January 18-21, 2025 in Navi Mumbai saw tickets being resold at astronomical prices. Those who couldn’t get tickets are flying to Abu Dhabi to see Coldplay perform there on January 9-14. The cost of the airfare, hotel stay and concert tickets in Abu Dhabi are for them worth the special experience. 

On the rise

A report by Goldman Sachs, The Rise of Affluent India, projected that the number of affluent consumers of luxury goods and services will nearly double from 60 million today to over 100 million in 2027. The Reliance group spotted the trend early. Its move into the consumer space has paid rich dividends. Jio World Plaza is a 7,50,000 sq. ft. Mumbai shopping utopia that hosts nearly 70 global luxury products including Bulgari, Valentino, Cartier, Bottega Veneta, Rolex, Louis Vuitton and Versace. Even online stores like Myntra, Nykaa and Tata Cliq have expanded their range to luxury products. 

Real estate is where the trend towards luxury is most evident. According to a report in Mint, real estate consultancy JLL India said “sales of luxury homes valued at Rs 50 crore and above soared by 51 per cent in 2023, reaching Rs 4,319 crore in value.”

The report added: “The Knight Frank India Attitude Survey, part of the Wealth Report 2024, revealed that 32% of India’s UHNIs allocate their wealth towards residential real estate assets, with nearly 14% of the residential portfolio allocated outside India. The Wealth Report 2024 identifies Mumbai as a prominent luxury residential market globally, ranking it eighth on the list, while Delhi and Bengaluru secured 37th and 59th positions, respectively.” 

Adrian Bosshard, global CEO of luxury watch brand Rado, is upbeat about the future: “More and more people are entering the purchasing class where they can afford a luxury statement piece. Swiss export figures are on a two-digit decrease in China and on a two-digit increase in India. That means the global luxury market is growing in India. Today I see India in the same position as China was 20 years ago. We are so confident about the future of the Indian market that I believe, for Rado, India could remain the number one market in the coming years.”

All that glitters though is not gold. The diamond industry, for example, is in dire straits due to the popularity of lab-grown diamonds that cost a fraction of real mined diamonds. The most experienced socialites confess they cannot tell the difference between real diamonds and lab-grown diamonds. 

The Surat diamond bourse is half-empty. Many workers are being asked to come to work just once a week. Given that India cuts and polishes 90 per cent of the world’s diamonds, the global fall in demand has been devastating. Buyers in the US and China are cutting back on orders. So are war-weary Europe and the Middle East. “Business is down by 30 per cent,” one diamond trader told me. But he hopes the market will revive and the romance of real diamonds returns.