NEW DELHI — Market studies have been predicting the real turning point for luxury markets in India for some years now, with 2014 and 2015 often mentioned as the defining moments of change.

This story first appeared in the April 5, 2013 issue of WWD. Subscribe Today.

In this context, the Mint Luxury Conference focusing on the next decade of luxury in India was more than the hand wringing over lack of proper infrastructure and high real estate costs.

The conference, held March 22 and 23 at the Taj Palace Hotel here, provided a real hard look at the market, bringing in the political perspective from commerce minister Anand Sharma, giving it an edge with the experiences of luxury brands from Europe, then adding views from Indian companies that work with luxury as well as real estate experts and an analysis of the market by Bain & Co.

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It was clear from the discussions that the new Indian maharaja is now the luxury customer, and his goal is often the possession of global luxury brands, including watches, accessories, jewelry and certainly cars.

The conference started with a note of caution from Sharma. The minister made it clear that the government was inviting change and that foreign investors could only benefit from the large and aspirational market in India. He said that luxury had seen fast growth in certain segments, for example with diamonds and jewelry. “It is also important to understand that if India is coming up as a market, it is also a rich source base,” Sharma observed.

Looking ahead, he said a key turning point would be the free-trade agreement with the European Union, which has been under negotiation since 2007 and is expected to make some conclusive headway in the talks scheduled for April 14 and 15.

“It will be a most ambitious trade agreement for India, covering 96 percent of India’s tariff lines,” he said.

Joydeep Bhattacharya, head of consumer products and retail practice for India at Bain & Co, described the traditional luxury market in India as worth $6 billion. Cars are one of the fastest-growing categories, with a growth rate of more than 40 percent. The personal luxury goods segment, which has had year-on-year growth of between 15 and 20 percent, is worth $1.5 billion, he said. This includes jewelry, watches, apparel, accessories, fragrance and cosmetics. He said that brands are responding with increasing awareness to India, with new brands entering the market and more innovative marketing and exclusive events. He said the appeal for visible luxury has been growing, and retail for luxury has been growing beyond the five-star hotels into hybrid malls, with about 60 luxury outlets in India.

The key has also been the growth of high net worth individuals in India, which have had a 200 percent increase, from 46,000 in 2006 to 132,000 in 2013. These are individuals with more than $1 million in onshore liquid assets. Meanwhile, households with an annual disposable income of more than $100,000 have gone up by 60 percent in the last seven years, from 700,000 in 2006 to 1.1 million in 2013.

India’s luxury market is much smaller than that of other countries, however, and compares with $75 billion in the U.S., $25 billion in Japan, $20 billion in China, $10 billion in Hong Kong and $4 billion in Brazil.

Missoni, which has recently signed up to launch in India with the Infinite Luxury Group, is expected to open its first store in New Delhi this summer. Alberto Piantoni, the company’s chief executive officer, told WWD that the growth for the brand was imminent in India, as was perhaps cooperation with a young designer who could interpret things in a Missoni way. “We have to cooperate and look at new challenges. The real challenge for India is how we can cooperate with the traditional sari even though we have our iconic items, which sell all over the world,” he said.

Armando Branchini, executive director of the Altagamma Foundation, has been closely watching the luxury space in India and noted that Indians shopped for luxury goods while traveling. “People buy European products and smuggle them back in, and the government is losing customs, and it is losing value-added tax and it is losing foreign investment and preventing job creation,” he said while observing that the free-trade agreement the minister had mentioned could make a key difference for European brands to work with India.

The critical factor for luxury in India has been whether the market is ready and the timing is right for the brands. “So, are we at the inflexion point?” Sanjay Kapoor, managing director of Genesis Luxury, said. “We’re close to it. A lot of people look at India and see the inflexion point coming closer. The reality is that the numbers are quite exciting. The same store growth has been 20 to 30 percent annually even though the economy has been slowing down. A lot of Western markets are slowing down and are looking at India now.”

Genesis Luxury has brands such as Burberry, Jimmy Choo and Canali in the country. Kapoor observed that luxury was a market that was in the throes of growth, and would continue to expand, despite the challenges.

Mark Henderson, chairman of Gieves & Hawkes, was more cautious. He said the men’s wear brand had 120 shops in China and none in India so far. “We would like to be in India, but how would we approach it? India is different from China. For India we have to know how we would manage the bespoke tailoring, the sourcing of products, the distribution. I think the penny is dropping. Culturally, does India want to follow the Savile Row style? It’s going to come down partially to how we engage,” said Henderson.

Other speakers at the conference included Fulvia Visconti Ferragamo, vice president, Salvatore Ferragamo; Indian designer Tarun Tahiliani; Guerlain perfumer Thierry Wasser, and Renaud Dutreil, chairman, Tigre Blanc.