Luxury retailer Richemont Applies to Open Stores in India

(IDEX Online News) – Luxury retailer Richemont whose jewelry brands, include Cartier, Piaget and Van Cleef & Arpels, has applied to open stores in India.

The luxury goods giant is joining other well-known international retailers who have entered the Indian market since the country eased investment rules.

The luxury sector in India has been held back by high tariffs, complicated laws and regulations and a shortage of retail space, leading many brands to mainly do business in luxury hotels.

Richemont has applied to enter in the 'single brand' retail space, where stores sell only one brand, for an initial investment of $5 million, a senior Indian government official told Reuters, though he declined to indicate when a decision might be made.

In the single brand sector, India allows 100 percent foreign direct investment on condition that a third of materials used in products is sourced locally.

Richemont said it planned to meet India's 30 percent sourcing requirement through the purchase of polished diamonds for the group as a whole using its India-based entity.

"There is a growing market of affluent young consumers and the property market is also changing," the firm said in a statement.

India accounts for just a fraction of global luxury retail sales, according to consultancy Bain & Co which says that just over $1.36 billion (1 billion euros) were generated in India out of the $294 billion (217 billion euro) global luxury goods market estimated in 2013.

Should India create a more favorable environment for luxury brands, the market could be worth at least 10 times more, according to some analysts.