India's Ultra-Rich Population To Rise 50% By 2028, Fastest Globally: Report
India’s ultra-rich population will grow 50% by 2028, boosting its luxury market, while Japan’s luxury growth slows amid global economic challenges and China’s downturn.
India will witness the world's fastest growth in the number of ultra-high-net-worth individuals (UHNWIs), with their population expected to surge by 50 per cent between 2023 and 2028, according to a report by McKinsey & Company and BoF.
The state of fashion luxury report says that the Indian luxury market is expected to grow between 15 and 20 per cent in 2025, fuelled by demographic and structural shifts.
According to the report, new luxury malls and department stores, such as the Jio World Plaza and Galeries Lafayette, are increasing luxury real estate in tier-one cities. It further adds that the newly increased taxes on imported goods over Rs 700,000 (USD 8,400) are expected to encourage domestic spending, although the domestic Goods and Services Tax on luxury goods remains high at 28 per cent.
Compared to the Indian growth, the Japanese luxury market is expected to grow between 6 and 10 per cent in 2025, retaining its position as a core luxury market. The growth in Japanese markets will be driven by both solid domestic demand and tourism spending.
Recently, NITI Aayog CEO BVR Subrahmanyam announced that India has overtaken Japan to become the world's fourth-largest economy. Citing data from the International Monetary Fund, the CEO of India's apex think tank stated that India's economy has reached the USD 4 trillion mark.
As per the report, Japan is home to the second-largest number of UHNWIs in Asia, which is expected to grow by more than 12 per cent from 2023 to 2028. The growth rate of UHNWIs in India is more than that of Japan.
According to the IMF's April edition of the World Economic Outlook report, India's nominal GDP for fiscal 2026 is expected to reach around USD 4.187 trillion. This is marginally more than Japan's likely GDP, which is estimated at USD 4.186 billion.
The report added that over the past five years, the luxury industry experienced a period of exceptional value creation. Between 2019 and 2023, unprecedented demand for personal luxury goods -- fashion, handbags, watches and jewellery among them -- combined With a deep well of supply allowed the sector to achieve a 5 per cent compound annual growth rate.
Luxury brands outperformed global markets and achieved new profitability records. But in the year 2025 so far, the luxury industry has faced a significant slowdown that has hit even top brands hard. For the first time since 2016 (excluding 2020), luxury value creation declined.
Several of the industry's growth-driving engines have stalled. Macroeconomic headwinds --especially in the key China market, which grew more than 18 per cent annually from 2019 to 2023 -- are weighing heavily on the sector, the report highlighted.
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