Driven by young and affluent buyers, India’s luxury market is expected to reach $12.1 billion by 2025

India’s luxury goods market is expected to grow by 10 per cent, reaching $12.1 billion by 2025, according to a new report, positioning the country as an important player in the global luxury scene. This expansion is driven by rising numbers of affluent individuals, rapid urbanization, and demand for both premium products and curated experiences.

According to data analysis firm Euromonitor International, the growth of the luxury market in India is among the fastest in the world, with South Africa and the United Arab Emirates also recording strong growth rates. Brands are adapting to consumer preferences by reimagining retail spaces and prioritizing personalized offerings that blend products with lifestyle experiences.

The report highlights that premium and luxury vehicles led value sales, supported by attractive financing options, an expanding urban consumer base, and a growing range of electric models. Experiential luxury, particularly in hotels, travel, fine dining and exclusive events, has emerged as the fastest growing sector. Younger, affluent buyers are driving this change by preferring unique experiences over traditional luxury products, a trend reinforced by the boom in tourism and tailored service offerings.

The global luxury market is estimated to be worth $1.5 trillion in 2025, demonstrating resilience in the face of ongoing macroeconomic and geopolitical turmoil. “Amid market uncertainty, the industry is undergoing a profound transformation, shifting from product-focused models to experience-based engagement.”

In India, physical luxury stores remain dominant, accounting for 81 per cent of personal luxury sales in 2025, underscoring the continued importance of personal engagement in the sector.

The shift towards experience-driven categories represents a marked change in luxury spending patterns, as consumers increasingly choose experiences over tangible goods. “Luxury spending has shifted from personal goods to experience-driven categories, reflecting deeper changes in consumer values. Experiential luxury has shown resilience, with luxury travel and hospitality markets growing 8 percent in 2025 to reach $103 billion,” the report said.

Health, lifestyle and emotional resonance are now prominent status markers, influencing how brands connect with their customers.

Luxury physical stores are evolving beyond transactional roles, becoming an expression of identity and exclusivity through enhanced hospitality and concierge-level service. Brands are transforming these retail environments into cultural destinations to inspire and reward loyalty through interactive experiences.

“Health, lifestyle and emotional resonance are emerging as new status markers, reshaping how brands connect with consumers,” said Fleur Roberts, Director of Global Luxury Goods Insights at Euromonitor International. The growth outlook is further supported by the growing number of affluent individuals in India, a major factor contributing to the expansion of the luxury ecosystem in the country.