NEW DELHI: India is projected to witness the fastest growth in its ultra-high-net-worth individual (UHNWI) population globally, increasing by 50 per cent between 2023 and 2028, according to a report by McKinsey & Company and The Business of Fashion (BoF), as quoted by ANI.This anticipated surge aligns with a robust outlook for India’s luxury market, which is expected to grow between 15 and 20 per cent in 2025. The report attributes this growth to structural and demographic shifts, along with expanding retail infrastructure in tier-one cities.Recent developments such as the opening of Jio World Plaza and the planned entry of Galeries Lafayette are expanding luxury retail footprints in major urban centres. Meanwhile, the government has introduced new import taxes on luxury goods priced above Rs 700,000 (approximately USD 8,400) to encourage domestic spending—despite the prevailing 28 per cent Goods and Services Tax (GST) on luxury items.In comparison, Japan- the second-largest market for UHNWIs in Asia- is forecast to see its wealthy population grow by over 12 per cent from 2023 to 2028. Japan’s luxury sector is expected to grow by 6 to 10 per cent in 2025, buoyed by strong domestic consumption and tourism.India’s broader economic ascent is also reinforcing this trend. Niti Aayog CEO BVR Subrahmanyam recently confirmed that India has overtaken Japan to become the world’s fourth-largest economy, citing data from the International Monetary Fund (IMF). According to the IMF’s April 2025 World Economic Outlook, India’s nominal GDP is projected to reach USD 4.187 trillion in FY2026, marginally ahead of Japan’s estimated USD 4.186 trillion.Between 2019 and 2023, the global luxury industry recorded exceptional growth, with demand for personal luxury goods—including fashion, handbags, watches, and jewellery—driving a compound annual growth rate (CAGR) of 5 per cent. Luxury brands outperformed broader markets and achieved record profit margins during this period.However, 2025 has brought a notable slowdown across the sector. The report indicates a decline in luxury value creation for the first time since 2016 (excluding the pandemic-hit year of 2020), with several key growth drivers—including strong Chinese consumer demand—losing momentum.China, which had recorded over 18 per cent annual growth in the luxury segment between 2019 and 2023, is now experiencing economic headwinds that are weighing on global performance.