India can play a potentially transformational role in the global luxury market, said Dr K.P. Krishnan, Additional Secretary, Ministry of Finance, Government of India. He was speaking at the CII-ET Dialogue on Luxury in New Delhi. The country, he elaborated, has a long tradition of luxury and with the post-liberalisation economic growth, rapidly changing mind set which embraces luxury more easily today and its vast population, India could transform the luxury space. Alluding to an economist who in 1899had postulated that as societies mature, conspicuous leisure gives way to conspicuous consumption, he said that was visible in India today, with an increasing number of people aspiring to and moving up the value chain in consumption patterns. In fact, the country offers a potential mass market for luxury goods in various price segments.Further, there was great scope to also create Indian luxury brands by linking our heritage and cultural crafts. This would benefit society and Indian economy by way of creating more jobs, among other benefits. He said there was a pressing need to look at stabilising the rupee, creating a conducive policy and taxation environment and address other issues such as infrastructure to put India firmly on the global luxury map.
Delivering the Special Address, Mr Marco Bizzarri, President & CEO, Bottega Veneta, said India and Italy have a lot in common, especially the tradition of luxury. Luxury, he said, is about heritage and linking it to the future. India with its rich heritage has much to build on, he elaborated, saying he saw tremendous scope for a flourishing luxury goods market in India.
Also delivering the Special Address, Mr Stefano Canali, General Manager, Canali, said that India could become a very important luxury market in the next decade and that the country’s policies must be conducive to make that a reality. He mentioned in particular the high import duties and other impediments such as infrastructure, which were negatively impacting India’s prospects. For example, he said, Canali has 70 boutiques in China, and fewer than 10 in India, and many Indians buy Canali from other markets such as Singapore, which results in India losing out on growth opportunities.
Earlier, in his welcome remarks, Mr Sanjay Kapoor, Chairman, CII Task Force on Luxury and Lifestyle and MD, Genesis Luxury Fashion Pvt Ltd, said that the royalty in India was known for its opulence, and the country has been associated with luxury – be it through its palaces, jewellery or textiles. The Indian consumer is changing and the guilt associated with luxury purchases is going away, as is evident from the expansion in the luxury goods market. He said despite the economic slowdown, the luxury market is poised to grow at 17% in 2014. He stressed on the need to address issues such as the current practice of clubbing retail and luxury products in the same category as well as the prohibitively high taxation rate on luxury goods to make India a ‘destination’ market for luxury goods.
In his closing remarks, Mr T.K. Arun, Editor, The Economic Times, sounded a word of caution for the attending delegates saying that India is very complex and that a simplistic view could be misleading. He said that subtlety was important to Indians and that therefore, luxury goods should not be positioned only as ‘markers of distinction through wealth’ but as products that reflect the class, artistic and cultural facets of the purchasers personality.
A CII-IMRB report on ‘The Changing Face of Luxury in India’ was also released on the occasion by Dr K.P. Krishnan.
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