The luxury boom in India should bolster Swiss watchmaking

The luxury boom in India should bolster Swiss watchmaking Keystone-SDA

India's rapidly expanding luxury goods market could benefit Swiss watchmakers, especially now that the two countries have signed a free trade agreement, according to a Deloitte study published on Monday.

The Indian luxury goods market is currently valued at $7 billion (CHF6.2 billion) and could reach “close to $30 billion by 2030”, according to the auditing and consulting firm’s projections, opening up prospects for “lucrative geographic expansion” for Swiss watchmakers, the study claims.

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In October, the firm, which publishes an annual report on the Swiss watchmaking industry, had identified India as a high-potential market for Swiss watchmakers.

But in the meantime, the countries of the European Free Trade Association (EFTA), of which Switzerland is a member, signed a free trade agreement in March, after 16 years of negotiations, prompting Deloitte’s Swiss branch to take a closer look at this market.

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The treaty still has to be examined by the parliaments of the EFTA countries, but “represents an important milestone towards strengthening economic ties between Switzerland and India”, say the authors of the study.

Over a seven-year period, the agreement will gradually reduce import duties, which “currently stand at 22-23%”. A tax on products and services, “which is 18% for watches”, will continue to apply, they calculate, but the gradual abolition of import duties will already help improve retailers’ margins and make the market “more attractive for Swiss watch brands”, writes the study.

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Among the watchmakers consulted for this study, some are still “somewhat timid” due to “the complexity of the Indian market”. However, the lowering of customs duties will enable manufacturers in the lower price ranges “to achieve greater profitability”, and thus come to offer “a wider choice of products to Indian consumers of all socio-economic classes”, the study continues.

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According to the authors of this study, India is a major growth driver, given the rise of the middle class, the potential offered by weddings where watches can be given as gifts, and the growing interest of the younger generation in luxury products.

Translated from German by DeepL/amva

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