Strengthening Ties Between France and India in Luxury Trade
PARIS — The luxury trade organizations of France and India are coming together as they prepare for a groundbreaking trade agreement. This agreement is expected to eliminate around 4 billion euros annually in tariffs on European goods.
This week, Bénédicte Epinay, CEO of Comité Colbert, and Payal Kanwar, Director General of the Indo-French Chamber of Commerce and Industry (IFCCI), signed a memorandum of understanding to enhance their cooperation. This collaboration aims to boost bilateral trade after years of missed opportunities.
“I believe it’s time for us to create a new narrative for India,” Epinay shared at a symposium in Paris attended by various government officials, luxury executives, and Indian designers.
Kanwar highlighted the changes in India’s retail landscape, pointing to the recent opening of Mumbai’s Jio World Plaza, which is elevating luxury shopping in one of the world’s largest economies. “There’s a new energy when French businesses look at India and vice versa,” she remarked.
The central focus of the meeting was the free trade agreement (FTA) between the European Union and India, projected to take effect around late 2026 or early 2027 after almost two decades of negotiations.
Once active, the FTA is anticipated to double exports of EU goods to India by 2032, by removing or reducing tariffs on 96.6% of merchandise — the largest reductions India has ever granted to a trading partner.
While luxury items make up a small part of European exports to India, major companies like LVMH Moët Hennessy Louis Vuitton see the potential in the burgeoning Indian middle class, estimated at 400 million.
“LVMH wants to expand its presence in India,” said Marc-Antoine Jamet, LVMH Secretary General. “We are poised to explore every opportunity here.” He described India as the “fastest-growing luxury market” and noted that the FTA would not only cut tariffs but also alleviate bureaucratic hurdles.
Jamet expressed his vision for LVMH’s growth in India, mentioning the need for more stores. Currently, LVMH employs only 300 people in India compared to thousands in the U.S. and China. “I envision a future where we have as many shops in India as we do in the U.S.,” he said.
The company is eager to tap into India’s rich resources, including cotton and traditional crafts like embroidery. “We want our brands to reflect local culture and craftsmanship,” he added.
In an interview, Epinay and Kanwar explained their plans to deepen mutual understanding and facilitate discussions between international companies and Indian authorities. Several conferences have been organized recently to showcase the opportunities in India today.
“As many luxury brands have not visited India lately, we want to highlight its evolution,” Epinay said.
Once the FTA is in place, most tariffs on textiles and apparel will be lifted, while the 22% tariffs on cosmetics will gradually be phased out over five to seven years. “This creates sales opportunities for brands, and enhances India’s status as a sourcing hub,” Epinay noted.
Wines and spirits will be significant beneficiaries of the agreement, with immediate cuts to wine tariffs from 150% to 75%, reducing to 20% or 30% over seven years, depending on the price.
A Bright Future Ahead
Kanwar mentioned that the IFCCI had formed a luxury committee to address the growing interest in India from foreign investors. This interest was spurred by the appointment of Leena Nair as global CEO of Chanel and notable events like Dior’s recent fashion show in Mumbai.
India’s retail market is currently valued at approximately $950 billion and is expected to reach $2 trillion by 2032, according to the Boston Consulting Group.
However, foreign retailers face challenges due to complicated regulations surrounding foreign direct investment (FDI), which set different rules for single-brand and multi-brand retail.
“While multi-brand retail remains tough, single-brand operations can now enjoy 100% FDI,” Kanwar explained. Some brands are consolidating to operate independently, marking a notable shift.
The entry of Galeries Lafayette in Mumbai signals growing confidence in the Indian market. Yet, acquiring product certifications from the Bureau of Indian Standards remains a challenge. “We are discussing ways to speed up the licensing process with authorities,” Kanwar added.
The European Union is not only a significant market for Indian suppliers but also a great opportunity for homegrown luxury brands, including renowned designers like Gaurav Gupta, Vaishali S, and Manish Malhotra.
With these developments, France and India stand to create a new chapter in the global luxury sphere. “Our doors are open for collaboration,” stated Sanjeev Singla, India’s ambassador to France. “You are welcome to explore and grow here.”
