India will witness the fastest growth in the world in the number of ultra-high-network-worthy individuals (UHNWIs), with their population expected by 50 percent between 2023 and 2028, according to a report from McKinsey & Company and BOF. The Luxury report of the State of Fashion says that the Indian luxury market is expected to grow between 15 and 20 percent in 2025, fed by demographic and structural shifts.
According to the report, new luxury shopping centers and department stores, such as the Jio World Plaza and Galeries Lafayette, are increasing luxury real estate in Tier-One Cities. It also adds that the newly raised taxes on imported goods are expected to encourage more than £ 700,000 ($ 8,400) to the domestic expenses, although the tax on domestic goods and services on luxury goods remains high at 28 percent. In comparison with Indian growth, the Japanese luxury market is expected to grow between 6 and 10 percent in 2025, which preserves its position as the core market of the core.
The growth in the Japanese markets will be powered by both solid domestic demand and tourism expenditure. Niti Aayog CEO BVR Subrahmanyam recently announced that India has overtaken Japan to become the world’s fourth largest economy. With reference to data from the International Monetary Fund, the CEO of India’s Apex Think Tank stated that the Indian economy has reached the $ 4 trillion. According to the report, Japan is the home of the second largest number of Uhnwis in Asia, which is expected to grow by more than 12 percent from 2023 to 2028.
The growth rate of Uhnwis in India is more than that of Japan. According to the IMF’s April edition of the World Economic Outlook Report, the nominal GDP of India for Fiscale 2026 is expected to reach around $ 4,187 trillion. This is marginal more than the likely GDP of Japan, which is estimated at $ 4,186 billion. The report added that the luxury industry has experienced a period of exceptional value creation in the last five years. Between 2019 and 2023 the unprecedented demand for personal luxury goods – fashion, handbags, watches and jewelry among them – combined with a deep source of supply, the sector was able to reach an annual growth rate of 5 percent.
Luxury brands performed better than the global markets and achieved new profitability. But in the year 2025 so far, the luxury industry has had to deal with a considerable delay that even hit top brands hard. For the first time since 2016 (excluding 2020), making luxury value fell. Several of the growth engines of the industry have stuck. Macro -economic headwind -especially in the most important Chinese market, which grew more than 18 percent annually from 2019 to 2023 roads on the sector, the report emphasized.
Published on 1 June 2025
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