NEW DELHI: The luxury market in India will grow from a current value of $8bn to $15bn by 2015, according to new figures.

A study from The Associated Chambers of Commerce and Industry of India (ASSOCHAM) and Yes Bank estimates that consumer spending on luxury goods and services is set to increase 25% annually between 2013 and 2015.

"The luxury market is poised to expand three fold in next three years and the number of millionaires expected to multiply three times in another five years," said DS Rawat, Secretary General of ASSOCHAM.

"Increase in spending is anticipated across India," he added, "with increasing brand awareness amongst the youth and purchasing power of the upper class in Tier II & III cities."

The luxury products sector is expected to see the fastest rate of growth, increasing 88% between 2012 and 2015 to reach a value of $5.38bn. Within this, jewellery is the single biggest contributor, accounting for 31% of the total.

Luxury assets are forecast to increase almost as quickly over the same period, at 83%, to reach $7.9bn. Cars have been particularly popular, growing at 40% a year since 2006, as a wider choice of brands has become available.

Slower growth of just 38% is predicted for the luxury services market, which is expected to be worth $1.45bn by 2015.

"Recent trends indicate a shift in the perception of luxury as an overall experience versus a mere material possession. This is evident from data on the Indian luxury services market which has shown resilience in the face of a global slowdown," said Rawat.

"Hotels are the largest growth contributor to this sector followed by travel, tourism and bespoke concierge services," he added.

The luxury market could be given a further boost from an unexpected direction. Jean-Christophe Babin, CEO of Swiss watchmaker TAG Heuer, told The Economic Times that China's recent ban on TV and radio advertisements for luxury items could lead to brands shifting resources to India to develop the market there.

Babin added that it was in any case time that luxury brands shifted their focus to India. "The Chinese market was kind of peaking out," he said.

He sees a large potential for luxury watches in India, especially for women's lines which currently account for just 26% of TAG Heuer's business there and which he hopes to raise to 40% or 50%, on a par with other markets in the region.

Data sourced from ASSOCHAM/The Economic Times; additional content by Warc staff