Need for change
Recently I went to attend the International New York Times’ Luxury Conference in Singapore. While talking to some of the CEOs of brands I realised that most of them are now unhappy with India as a market. A decade ago, their thinking was different; they thought it will be a market to reckon with and has a huge potential for luxury products.
While they still think the country has huge potential, they are not happy with the policies of the government changing with regards to import duties and tariffs. India levies heavy import duties for luxury brands and add to that the real estate prices prevalent here. Both combined, doing business here has become a nightmare for most of these brands. Barring a few, the rest are struggling to make their presence profitable here.
While duties and other tariffs remain the same, the real estate sharks charge a hefty sum as rentals in whatever few malls that we have in India. Since we don’t have high streets and most hotel shopping arcades are out of retail spaces, these brands are forced to go to the high-end malls, who know that the brands are desperate to open shops here, charge them a bomb.
If luxury business need to grow in India, this needs to change. Newer stores and newer brands being launched will no doubt will pave the way for more employment to Indians and more funds to the treasury by way of taxes and duties. In order to get this, the duty structure need to be conducive for them to do business here and rentals will have to come down drastically.
Without these, the surging middle-class population will hardly encourage them to launch new brands or open more stores in India.