Luxury Goods in India

Luxury goods in 2025: The big picture

In 2025, luxury goods in India demonstrated dynamic retail current value growth, building on the momentum established in the preceding years. The primary drivers of demand remained increasing disposable incomes, an expanding aspirational middle-class, and a growing number of high-net-worth individuals (HNWIs). The influence of socioeconomic trends, notably the younger consumer base, comprising Millennials and Gen Z, significantly shaped the industry, with these demographics prioritising lifestyle alignment, sustainability, and authenticity in their luxury consumption choices. Macroeconomic stability and a gradual recovery in global trade further supported premium spending, although external challenges such as inflationary pressures and geopolitical uncertainties tempered growth rates relative to the peak growth rates of 2021-2023. Nonetheless, these factors collectively created a favourable environment for luxury goods consumption throughout 2025.

2025 key trends

In 2025, luxury goods in India was significantly shaped by the increasing emphasis on sustainability, personalisation, and the integration of artificial intelligence (AI). Across India, environmental credentials have been transitioning from nice-to-have marketing to a consumer prerequisite in luxury goods, with luxury brands adopting eco-friendly practices and sustainable sourcing to cater to the rising consumer demand for ethical products. This trend was particularly pronounced in personal luxury and premium and luxury cars, where consumers sought products that aligned with their environmental values, whether that be the use of sustainable materials in products, eco-friendly packaging, or circular economy practices. Concurrently, AI technologies have enhanced personalised shopping experiences, allowing brands to tailor their offerings more precisely to individual preferences, thereby boosting consumer engagement and loyalty across categories such as luxury jewellery and fine wines/champagne and spirits. The convergence of technology and sustainability fostered a more discerning yet sophisticated consumer mindset, positively influencing sales.

Competitive landscape

As premium and luxury cars led sales of luxury goods, and due to a high level of consolidation in this category, in 2024 luxury goods in India was led by leading luxury car manufacturers, with Mercedes-Benz India maintaining its leading position in terms of value sales. The success of the Mercedes-Benz brand can be attributed to its comprehensive portfolio of premium vehicles, which effectively combine luxury, performance, and advanced technology. The launch of the new EQS 450 SUV in January 2025 further highlights the brand’s commitment to electric vehicles (EVs). The surge of interest in EVs led Mercedes-Benz to broaden its EV offerings and introduce innovative models that cater to the evolving preferences of consumers. In brand terms, BMW and Audi retained their second and third positions respectively, by leveraging their unique brand strengths. BMW focused on performance enthusiasts with its dynamic SUVs and sedans, while Audi targeted a younger demographic with its sleek designs and cutting-edge technological features. The expansion of dealership networks into tier-2 and tier-3 cities reflecting a broader trend of luxury consumption extending beyond metropolitan areas.

Retail developments

In 2025, luxury goods in India continued to exhibit a nuanced blend of offline and online distribution, reflecting shifting consumer preferences and trends. Offline retail maintained its overwhelming dominance, as physical outlets, particularly those situated within upscale shopping centres and luxury shopping districts in metropolitan areas such as Mumbai, Delhi, and Bengaluru, offered immersive brand experiences, highly prized by luxury consumers seeking personalised service and immediate product availability. Notably, luxury brand boutiques within premium department stores experienced significant growth in 2025, enhancing brand visibility and creating a curated shopping environment. The emphasis on experiential retail, characterised by exclusivity and high-touch customer service, reinforced the importance of physical stores as key touchpoints for luxury purchases, particularly in high-involvement categories such as luxury timepieces and fine wines/champagne and spirits. For example, TimeVallée opened a new store in Chennai in 2025 – a three-storey boutique which offers an immersive and elevated experience for purchasing luxury watches, with a curated collection of luxury brands, bookable appointments to provide a personalised service, and even a café.

What next for luxury goods?

Luxury goods in India is poised to exhibit robust retail current value growth over the forecast period 2025-2030, with a double-digit compound annual growth rate (CAGR). This will be driven by the expanding demographic of HNWIs, UHNWIs, and affluent adults. The number of wealthy consumers in India is projected to rise steadily, supported by robust economic growth, entrepreneurial activity, and increasing wealth generation across diverse areas. This demographic change, coupled with evolving consumer attitudes that increasingly favour luxury consumption as a lifestyle aspiration, creates a strong foundation for sustained value sales expansion in key luxury categories, including luxury hotels, personal luxury, and premium and luxury cars.