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Can India be luxury’s next big thing?

Slowing demand in China has pushed brands to seek pockets of growth in new markets

At a heated polo game in New Delhi — a contest between India and Argentina billed as the “match of the century” — fashion executive Adrian Simonetti explained why he believed India had the potential to be a strong luxury market.

“Luxury in India is no longer about labels, it is about belonging to a global lifestyle,” said Simonetti, co-founder and chief executive of La Martina, a high-end leisure sports and polo gear brand headquartered in Argentina.

“There is a new generation with international exposure, strong purchasing power and a deep appetite for brands that carry authenticity,” he said.

The Argentine retailer is part of a wave of brands searching for growth in India as demand slows in China — which before the Covid-19 pandemic accounted for a quarter of global luxury demand — as a result of a cooling economy and shifting consumer tastes.

But India remains difficult to develop due to logistical challenges, a lack of luxury shopping malls and the tendency of wealthy Indians to travel to Dubai, Singapore or countries in Europe to shop, according to industry experts. High customs duties and bureaucracy have also slowed growth.

Luxury sales across all emerging markets — spanning Latin America, the Middle East, south-east Asia including India, and Africa — are equivalent to the €40bn to €45bn in sales China is expected to have generated in 2025, according to consultancy Bain & Co.

Louis Vuitton, luxury’s biggest brand with more than €20bn in annual turnover, has three boutiques in India, whereas it has dozens in cities across China. Industry experts have described domestic demand in India as “nascent”.

But despite the hurdles, brands see opportunities for growth in India in its growing ranks of millionaires. Groups including L’Oréal and Estée Lauder, which first began selling products in India in 2005, are expanding in the country.

India can “become a bigger contributor in the growth algorithm of the company”, Estée Lauder’s chief executive Stéphane de La Faverie told the Financial Times in October.

Last year, Stella McCartney’s fashion label became the latest addition to a roster of luxury names, including Burberry, Emporio Armani and Versace, brought into the country through a partnership with Reliance Industries, the conglomerate run by Asia’s richest man, Mukesh Ambani.

French upmarket department store Galeries Lafayette opened its first India outlet in Mumbai in October. Kumar Birla, the billionaire chair of the Aditya Birla Group, which helped bring the store to India, described the partnership as “a coming-of-age moment for Indian luxury retail”.

India ranks among the world’s five fastest-growing luxury markets with a current value of $12bn, according to Euromonitor International.

“India’s trajectory is steeper than most regional peers, supported by rising affluence, expanding retail infrastructure and increasing interest in wellness and experience-led luxury,” said Pallavi Arora, senior analyst at Euromonitor.

India’s high import taxes have been a drag on luxury sales in the country. Taxes on items often exceed 20 per cent, alongside domestic goods and services tax rates of up to 40 per cent, said analysts.

New Delhi has traditionally imposed high import duties, earning it the moniker of “tariff king” from US President Donald Trump, who in August slammed the country with a 50 per cent levy. Under some of the proposed trade deals still being negotiated with the US and EU, tariffs on imported goods could fall, potentially reducing prices.

“Many Indians still prefer to buy luxury goods abroad because prices are lower and product choices are wider,” said Euromonitor’s Arora.

Victor Graf Dijon von Monteton, partner at consultancy firm Kearney, said strong growth in India was far from offsetting the weakness in China.

“The baseline is so much higher in China,” von Monteton said, noting that 4 to 5 per cent growth in China’s luxury market would bring more additional revenue than India in its entirety. He noted that China’s luxury market took about 20 years to mature and India was only halfway along that journey.

One Mumbai-based billionaire told the FT they were sceptical luxury would truly take off, pointing to empty marble-floored malls in Mumbai with many wealthy Indians still preferring to shop during trips to Dubai, Singapore, London and Paris.

The billionaire noted that the pool of consumers with disposable income for luxury purchases remains small, with the country’s GDP per capita at about $3,000 in contrast with China’s $13,810, according to the IMF.

Reliance Retail’s foreign brands division lost about $30mn in the past financial year, according to the company’s last annual results up to March 2025.

“Limited scale, high overheads and regulatory hurdles keep many joint ventures unprofitable,” said Ankit Yadav, engagement manager at Redseer Strategy Consultants, an advisory firm.

“High rentals and the scarcity of grade-A mall infrastructure continue to be major constraints for luxury retail expansion beyond [main cities].”

India’s demand for more “accessible” luxury has prompted many brands to launch “smaller-ticket products and limited-edition collections priced 50 to 70 per cent below flagship offerings to engage aspirational consumers”, Yadav added.

For now, von Monteton said Kearney was advising clients to invest in India because “if you’re coming in at a later stage, you’re probably not going to win over the Indian consumer”.

That is advice that Simonetti is fully on board with as he sat among New Delhi’s elite at the polo field. La Martina has 15 stores in the country in partnership with Reliance and has plans to open 11 more by March.

“Polo already resonates strongly with India’s elite sporting culture,” said Simonetti.

“We are also in south-east Asia and in China, but with smaller operations,” he said, “India is something else.”

Lobbyists want to see legislation passed while Republicans still have control of Congress

Big crypto players have turned against a landmark bill to regulate digital assets, which industry lobbyists had been pushing in a rush to pass a favourable rule book before the midterm elections.

The bill known as the Clarity Act, a sweeping piece of legislation to govern the multibillion-dollar US crypto sector, was delayed in the Senate this week after Coinbase chief executive Brian Armstrong publicly withdrew his support.

Infighting over the legislation, a version of which passed the House of Representatives in July with support from crypto lobbyists, imperils an effort to move the bill through the Senate before lawmakers turn their attention to this autumn’s congressional elections.

“There’s definitely an assumption that crypto is not going to have a friendly Congress post-midterms,” said Gabe Rosenberg, partner at law firm Davis Polk. “This is the shot.”

Discontent around the legislation marks the first big political setback for the American crypto industry since Donald Trump returned to the White House.

His administration has made crypto a national priority and sought to implement crypto-friendly regulations, as well as pardoning well-known crypto figures and signing the so-called Genius Act to regulate stablecoins.

The Clarity Act introduces a sweeping regulatory framework for digital assets, ranging from bitcoin to obscure derivatives, and determines which agency among the country’s securities and commodities regulators should have oversight.

Crypto companies have had to battle bank lobbyists over the bill, with the main dispute relating to the rewards that are paid to people who own stablecoins, digital tokens pegged to the US dollar. 

Banks have fought to limit those rewards — arguing that allowing individuals to earn more interest on dollar-linked tokens than they do in their bank accounts will lead to “deposit flight” and dent lending.

Bank of America chief executive Brian Moynihan, on an earnings call this week, said a movement of funds out of the traditional banking system would “reduce lending capacity of banks, [which would] particularly hurt small and medium-sized businesses” compared to larger borrowers that have access to other sources of debt.

US banks were “spending a lot of money in DC” lobbying to stop crypto companies from being able to pay interest, said Geoff Kendrick, global head of digital assets research at Standard Chartered, adding that the banks “know they’re in trouble” when it comes to competition.

Tokens that represent ownership of stocks are another point of friction, with crypto players crying foul at a last-minute addition of language that would make it harder for these assets to get permission to trade.

Jonathan Jachym, global head of policy and government relations at crypto exchange Kraken, said the changes “created some unnecessary frictions and distraction”.

Meanwhile, decentralised finance groups are fighting against politicians and more traditional market makers over obligations related to anti-money laundering and other controls. They argue these rules would make it more difficult for software developers to build crypto systems that do not have centralised oversight, hampering innovation.

These disputes contributed to Coinbase’s last-minute change of heart and led to a Senate committee review, known as mark-up, being called off the night before it was due to proceed.

“There’s a lot of forces at play here, and that was coming together at the last second for a bill that was still being negotiated hours before the mark-up itself,” said Ron Hammond, the head of policy and advocacy at Wintermute.

Democratic politicians have been pushing for limits on public officials profiting off ties to crypto businesses — a move that partly targets the Trump family’s extensive crypto interests.

Crypto lobbyists fear that if Democrats gain seats after the midterms in November, or take control of either chamber of Congress, the digital asset sector will face a much more sceptical environment.

The fate of the nearly 300-page bill is uncertain as the Senate is on recess and no deadline has been set for another committee vote.

“It’s still got momentum, and that’s the main killer or driver here,” said Hammond. “The second this bill loses momentum politically, I would consider it dead in the water, but right now, it’s got a lot of momentum from all those outside pressures, including the White House.”

KKR just released an 88 page report on their 2026 outlook for public and private markets

--> Have a look : https://x.com/BoringBiz_/status/2012531683484934157?s=20

Mid-cap companies are often overlooked by investors, who either stick with large-cap companies or look to small-cap names if they want to diversify. But 2026 may be the year mid-caps come out of the shadows.

Several factors are coming together that could make this year an exciting time for the stock market’s middle child, say Don Peters and Dante Pearson, managers of the $4.4 billion T. Rowe Price Diversified Mid Cap Growth fund.

Compared with large-cap companies, mid-caps generally need more money to grow, so as the Federal Reserve continues its easing cycle, midsize companies often receive an outsize benefit from lowered borrowing costs. The outlook for earnings growth is strong for 2026, and companies that are going public now are often listing as mid-caps—instead of small-caps—having stayed private for longer. Finally, mergers and acquisitions activity could increase because of an accommodating regulatory environment, further giving mid-caps a boost.

Unlike more-volatile small-cap companies still gaining their footing, or large-cap companies unlikely to experience rapid growth, the best mid-cap companies are transforming into higher-margin, higher-return-on-capital businesses. But only about 15 sell-side analysts on average cover mid-cap companies, so many good ones are growing unnoticed, the fund’s managers say.

“That’s one of the many benefits that we appreciate in mid-cap investing,” Pearson says.

Morningstar gives Mid Cap Growth five stars and a silver medal, which means the firm has a high conviction the fund will outperform its index and its peers over a full market cycle on a risk-adjusted basis. The no-load fund charges annual fees of 0.84%, which Morningstar calls below average.

The fund beats its peers across short- and long-term time frames. It has a 14% 10-year annualized return versus peers’ return of 12.1%, putting it in the top 10% of mid-cap growth funds. Mid Cap Growth also beats the Russell Mid Cap Growth index’s 10-year return of 13.3%, net of fees.

Peters has run the fund since its 2003 inception, and Pearson has worked with Peters since joining T. Rowe in 2017, first as an analyst; he was officially named associate portfolio manager in 2024. At the end of December, Pearson will take over as lead portfolio manager, and Peters will leave the fund after a transition. Peters will continue to manage the $1.4 billion T. Rowe Price Tax-Efficient Equity fund. “It will be the most uneventful transition on record because we’ve worked together for years,” Pearson says. “Consistency is the approach.”

The duo seeks steady, long-term outperformance through disciplined stock selection, rather than by timing the market or making big sector bets.

“We want to have companies that we think will grow up to become larger and successful,” says Peters. “Successful companies are good capital allocators, have management teams that execute well, and aren’t overvalued.”

They rely on T. Rowe analysts’ bottom-up fundamental research to find companies trading at discounts relative to their history and that show signs Wall Street is underestimating long-term revenue growth. Peters and Pearson have found over the years that, more than any other metric, the strength of analysts’ expectations is key to how well stocks will perform.

“Nothing always works, but when good news is happening to companies, when numbers are moving up, your hit rate goes up substantially. That’s our focus more than any specific style or [metric],” Pearson says.

They also have sharp risk controls. Every six months they review all their investments, looking at corporate debt levels and revisiting portfolio positioning to map out how each holding correlates with other investments and to estimate how each name would perform during bearish market extremes. Peters says they consider risk management as a contributor to their excess return.

Peters and Pearson let their winners ride to take advantage of compounding, but they will gradually sell when mid-caps graduate to large-caps, using the Russell Mid Cap benchmark cutoff as their guide.

One of the bigger mid-cap names they own is No. 1 holding Howmet Aerospace, which they first bought in 2022. The specialty-parts manufacturer of aerospace components contributed handsomely to last year’s strong performance. It is currently trading at 47 times 12-month forward earnings, which Peters says is somewhat expensive, but it boasts consensus estimates of 23.8% on long-term revenue growth over three to five years.

Mid Cap Growth bought luxury-goods company Ralph Lauren this past summer, and the duo are impressed with how management continues to nurture the brand. It trades at 21.7 times 12-month forward earnings, and long-term revenue growth is estimated at 13.5%.

“They’re playing the long game and are cheaper than the traditional European luxury companies,” Peters says, also pointing out that Ralph Lauren isn’t overly dependent on any one region for growth, unlike some peers that were overexposed to Chinese consumers when that economy softened.

Two purchases in the past 12 months demonstrate how Peters and Pearson think about portfolio composition to keep their roughly 245 holdings diversified.

They bought Encompass Health, the dominant player in the patient rehabilitation hospital market, in June 2024. They expect it to benefit from demographic demand as baby boomers and Gen Xers need services such as joint replacements and have major medical events such as strokes. Costs for these services are cheaper at hospitals like Encompass, Peters says. The stock trades at 18.2 times 12-month forward earnings, with long-term growth estimates around 14.4%. They expect this lesser-known company will be a solid compounder.

Peters and Pearson are impressed by the way Colleen Keating, the relatively new CEO of Planet Fitness, seems to be turning around the company. She was brought on in June 2024, and the duo bought the low-cost gym franchise a month later, with an eye on the trend of healthy living.

“It’s easy to join and quit, so it’s not a roach motel for customers,” Peters says, noting that it trades at 29.2 times 12-month forward earnings, with growth estimates at 15.6%.

Mid Cap Growth’s portfolio is intentionally structured to prevent a few holdings from dominating returns. That diversity also helps the portfolio perform in various economic environments, the duo says. With its focus on valuation, the fund tends to lag behind its peers when market leadership is driven by speculative or risk-seeking markets, or when markets are driven strongly by momentum.

While they see 2026 as being a good year for mid-caps, Peters and Pearson don’t take views on the economy, market direction, or other macroeconomic calls as they look for potential new holdings.

“We generally just try to find low-cost producers that have good capital allocation,” Peters says.

With the U.S. and China battling for economic and geopolitical supremacy, it’s fashionable to cast Europe as the global sick man.

The European Union’s trade deficit with China has nearly doubled since before the pandemic, reflecting eroding competitiveness in advanced industrial goods. The Old World is all but shut out of the artificial-intelligence revolution. Not to mention President Donald Trump threatening to seize Greenland from NATO ally Denmark.

“The Chinese have caught up in manufacturing, and we’ve been overtaken in AI,” says Carsten Brzeski, Frankfurt-based global head of macro at ING Research.

The EU took a small step toward battling back on Jan. 9, when enough member states backed a free-trade agreement with the Mercosur bloc of South America, including Brazil, Argentina, Bolivia, Paraguay, and Uruguay. Small is the operative word for the moment. The EU’s two-way trade with Brazil, the Mercosur giant, was less than 5% of its combined volumes with the U.S. and China last year.

“This is as much a political message as an economic agreement,” says Eoin Drea, senior researcher at the Wilfried Martens Centre for European Studies.

Protests by European farmers nearly sunk the Mercosur pact after 25 years of negotiation. A last-minute switch to “Yes” by Italian Prime Minister Giorgia Meloni pushed it over the statutory line of approval by states comprising at least 65% of the EU population.

But the EU, whose collective gross domestic product still rivals China’s as the global No. 2, has it eyes on a bigger role: anchor for a rest-of-the-world seeking alternatives to two increasingly heavy-handed superpowers. German Chancellor Friedrich Merz, on a Jan. 12 visit to India, floated a Delhi-Brussels trade pact within a month. The EU and Japan last year upgraded their 2019 “economic partnership agreement” to a “competitive alliance” meant to “promote bilateral investment and simplify rules for business,” according to an EU press release.

The EU-Mercosur pact could also boost a few stocks, though immediate market reaction was tepid. European auto makers Stellantis and Volkswagen have the four top-selling models in Brazil, which should become more affordable with tariffs plunging.

Winners on the South American side could include JBS, the Brazilian company that is the world’s biggest meat packager, smaller rival Marfrig Global Foods, and paper giant Suzano Papel e Celulose. “Paper mills in Europe have been closing down,” notes Michael Field, European equity strategist at Morningstar.

The EU pursues its trade counteroffensive with some economic wind at its back. The bloc has stuck the soft landing from postpandemic inflation that so far eludes the U.S. European Central Bank interest rates are at 2%, with inflation holding steady around that level.

Growth chugs along above 1% annually with Germany’s long-awaited fiscal stimulus starting to materialize. Power prices have substantially recovered from their shock after Russia invaded Ukraine nearly four years ago. “We’re in a Goldilocks period,” Brzeski says.

Most of that good news is already in stock prices after the iShares Europe exchange-traded fund climbed 35% over the past year, Morningstar’s Field thinks. “The easy gains are over,” he says. ING looks for a 6% return on European stocks this year, Brzeski says.

Europe needs to use the benign macro backdrop, and a political breather before French presidential elections in 2027, to rebuild competitive muscle. “The next two years will really show if we are able to turn things around,” Brzeski says.

Amazon, Meta, and other large tech companies are issuing more debt than ever. Why you should steer clear.

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