EU-India trade deal set to reshape luxury's next growth frontier
A forthcoming free trade agreement between the EU and India will cut tariffs on the vast majority of European exports, and luxury groups including LVMH are already positioning for the shift.
France and India are strengthening commercial ties ahead of a free trade agreement between the European Union and India that would eliminate or reduce tariffs on 96.6% of EU goods exported to India, according to WWD. Luxury groups, LVMH Moët Hennessy Louis Vuitton chief among them, are preparing for a deal that would materially cut the cost of bringing European wines, spirits, fashion and leather goods into one of the world's fastest-growing consumer markets.
India has long been a target for luxury expansion but has remained a difficult market to crack profitably, hampered by import duties that can run high on categories such as wines, spirits and apparel. A tariff reduction of this scale would narrow the price gap between goods bought in India and those bought in Europe, a gap that has driven affluent Indian shoppers to buy luxury goods while travelling rather than at home. Lower duties would also make it more viable for brands to open and staff full-price flagship stores in Indian cities rather than relying on travel retail and grey-market demand.
The strategic read is that this is as much about supply chains and market entry as sentiment. French and Italian luxury houses have expanded India-facing operations gradually, but a formal trade agreement would give groups a firmer basis to commit capital to stores, distribution and local partnerships. It would also intensify competition for wealthy Indian consumers among European houses that have historically prioritised China and the Gulf.
What to watch is the timeline for ratification and whether the agreement includes specific provisions for luxury categories such as spirits, where duties in India have historically been steep. Any final text, and the pace of store rollouts that follow from LVMH and its peers, will signal how seriously the group treats India as a near-term growth market rather than a long-term aspiration.
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