India’s luxury goods market set to grow by 10%, hit $12.1 billion by 2025: Report

New Delhi: India’s luxury goods market is expected to grow by 10 per cent to reach $12.1 billion (over ₹1 billion) by 2025, positioning the country as a rising force in the global luxury sector, according to a new report by Euromonitor International.

The report highlights a broader transformation in the luxury retail space, with brands shifting away from traditional, product-led models to offer lifestyle-driven, experience-based engagements. India is among the top three fastest-growing luxury markets globally, behind South Africa (15%) and ahead of the UAE (9%).

The growth is driven largely by India’s expanding affluent class, increasing urbanisation, and a growing appetite for both high-end products and unique experiences. The report projects India will see a compound annual growth rate (CAGR) of 74 per cent during the forecast period, underlining its strategic significance in the global luxury ecosystem.

Luxury cars, travel, and lifestyle lead the surge

Premium and luxury cars remain the top-performing segment in value sales, boosted by a rise in high-income consumers, urban expansion, attractive financing schemes, and a growing interest in electric vehicles.

Meanwhile, experiential luxury — which includes luxury hotels, bespoke travel, fine dining, and exclusive events — has emerged as the fastest-growing segment. This trend is being fuelled by younger consumers who are prioritising personalised and immersive experiences over ownership of physical goods, supported by a post-pandemic rebound in tourism.

In 2025, 81 per cent of personal luxury goods sales in India were still made through physical stores, a testament to the enduring value of in-person shopping experiences. Brick-and-mortar luxury outlets are now evolving into immersive spaces that blend retail with high-end hospitality, offering concierge-level service and storytelling that enhances brand loyalty.

Globally, the luxury market is estimated to reach $1.5 trillion in 2025, showing remarkable resilience in the face of economic and geopolitical uncertainties.

"Amid market uncertainty, the industry is undergoing a profound transformation, shifting from product-centric models to experience-driven engagement," said Fflur Roberts, Global Insight Manager for Luxury Goods at Euromonitor International. “ Wellness, lifestyle and emotional resonance are emerging as new markers of status, reshaping how brands connect with consumers.”

While e-commerce continues to grow, luxury brands are increasingly reimagining their physical stores as cultural and lifestyle destinations that foster long-term relationships with their clientele.

Additionally, luxury travel and hospitality markets alone grew by 8 per cent in 2025, reaching $103 billion, reflecting a global pivot toward experience-based spending.

IANS