Delegates at the Mint-Hindustan Times Luxury Conference urged the government to do more to lure high-end products to this once socialist-style country that has transformed rapidly in the past decade to become an economic powerhouse. Still, “there is no free and fair play for luxury goods in India. It is a regulated market,” said Armando Branchini, Managing Director of Altagamma, an association of Italian luxury goods.
Unlike China where the import duty on luxury goods were as low as 20 per cent, he said, the customs duty in India is upwards of 45 per cent.
Branchini said over-regulation is not only affecting imported luxury goods, it is also “dramatically impacting India’s own domestic luxury goods market”.
“This mechanism is preventing development of India’s luxury goods market. We don’t want anything else but business freedom for imported luxury goods and opening up the market for FDI,” Branchini said.
Commerce Secretary Gopal K Pillai, however, disagreed that India’s policies were not WTO compliant. “We have not received any single complaint so far on that India’s tax regime on luxury goods is not WTO compliant. We are a signatory to the WTO and if the industry can tell us and convince us we will change the regime,” he said.
Pillai said the average industrial tariff is currently about 9 per cent. “Our tariffs are coming down year after year and we are lowering it item by item,” he said.
The commerce secretary said the luxury goods industry needs to educate policy makers about the value it ushers into the economic system, both in terms of design and employment generation. “The industry should use the arguments to persuade the policy makers to change existing norms,” Pillai said.
Sanjay Kapoor, MD, Genesis Colors, said comparisons with China may be incorrect “as we have a strong IPR regime in India”.