What: India is becoming an attractive market for luxury retailers as the country’s increased spending power and fast-growing economy has led to a rise in affluent customers.

Why it is important: Western luxury brands, including Galeries Lafayette who is set to open its first store in India in 2024, are taking notice of the growing luxury market in India.

Galeries Lafayette has partnered with Aditya Birla Fashion and Retail to enter the Indian market, reflecting the country’s growing appetite for luxury goods.

The luxury department store is currently refurbishing two 100-year-old heritage buildings in the heart of Mumbai to open a store that will spread across 90,000 square feet and carry more than 200 luxury and designer brands.

The partnership also includes the launch of an e-commerce platform and another store in Delhi.

Previously, India hasn’t been a major market for Western luxury brands as complex regulations and limited retail space present challenges. However, due to the increase in spending power, that seems to be changing as the World Bank ranked India 63rd for ease of doing business in 2022, a big jump from being 142nd in 2014.

While there has always been an appetite for Western luxury brands in India, brands are now targeting first-time customers who will fuel the growth.

With the Indian economy expected to grow to USD 5 trillion over the next few years, more brands are bound to enter and invest in the market as an increase in young affluent consumers continues and the aspirational middle class becomes stronger.

India’s growing economy attracts Western luxury brands