Paran Balakrishnan: Indians developing a taste for the finer things in life

Time magazine once labelled him the Sheikh of Chic. And Sheikh Majad al Sabah, a nephew of the Emir of Kuwait, is definitely one of the most astute businessmen in that small, oil-rich country. He has turned his Villa Moda luxury stores into exclusive palaces where you can shop for everything from Fendi to Ferragamo or just plain old Gucci.

Al Sabah is spreading his wings and moving out of the sheikhdom to Mumbai, India's commercial capital. He has seen India's newly affluent in shop-till-they-drop mode at his glass-fronted Kuwait boutique and reckons that business will be good in this teeming metropolis.

But being a smarter operator than many others, he's acutely aware that luxury boutiques are still slightly out of place in a country where vast swathes of the population subsist on a few rupees a day and are firmly below the poverty line. So, at a recent conference on selling luxury in Mumbai, he vowed tearfully that 5 per cent of every sale would go to the poor.

Al Sabah's charity pledge is novel for India and it may give him a certain unique selling proposition. But he's just one of a host of luxury manufacturers who have suddenly zeroed in on the country as its economy racks up scorching 8 per cent growth.

Recently shoemaker to the smart set Jimmy Choo announced that he will be high-stepping to India. Other luxury vendors looking at the numbers include Gucci and British player Asprey & Gerard. Big names such as Chanel and Bvlgari had splashy launches to open their boutiques a few months ago. It has become almost de rigueur among the smart set to own at least one piece of Louis Vuitton arm-candy.

Ferrari, the last word in automobile one-upmanship, is powering its way to India this year. It will join other road monsters such as Porsche, which launched in 2005. For the truly rich, Bentley has just opened a showroom in Delhi, and its sales so far are promising. If you aren't in a league that can fork out six-figure dollar prices, there are other smart cars such as the Audi A4 - a competitor to the Mercedes C-Class - which just hit the roads this month at the Delhi Auto Show.

Luxury brands and boutiques are a part of the retail landscape in most parts of the world. But India is a country brought up since Independence in 1947 on a mix of Gandhian asceticism and tough rules that strictly curbed imports.

More crucially, most Indians - even the ones in top-level jobs - earned far less than their peers in the developed world and couldn't afford the trinkets and baubles sold in places such as Bond Street, Place Vendome or Rue St Honore.

Now India is playing catch-up with the world. The job market is booming, headhunting is the order of the day and so everyone is taking home chunkier paypackets. In some sectors, the transformation from the relative poverty of the past is quite startling. India's top software company, Infosys, has in the last decade created several hundred dollar-millionaires with its stock options. Similar scenarios are being played out at other high-tech companies.

So what's the best way to demonstrate that you've arrived? How about carrying a Louis Vuitton briefcase with the linked LV logo emblazoned all over it? Nothing discreet about that. Alternatively, on a grander scale, how about steering a course through India's wild traffic in a Bentley Azure? A Bentley will still turn eyes in a country that, through the 1960s and 1970s, had only three types of cars on the road. The most famous one, the Ambassador, was based on an early 1950s Morris Oxford, and it's still being made just outside Kolkata.

All the luxury brands that have made their way to India in the past two years are reporting blockbuster sales growth. Louis Vuitton, one of the early movers, says business is booming. Danish tech company Bang & Olufsen has been here seven months and says its plasma TVs and top-of-the-line sound systems are flying off the shelves at a speed it never expected. Even the Bentleys and Porsches are attracting plenty of prospective buyers kicking tyres at showrooms.

But selling luxury in India can run into unexpected complications.

How about holy cows for a start? That's what you might find roaming about some of Delhi's supposedly smart shopping complexes. Some of the city's older markets haven't been scrubbed and smartened up for the 21st century and are far too grubby to be selling Louis Vuitton and Prada.

Alternatively, how about retreating to the new glittering shopping malls that are sprouting all over Delhi, Mumbai and other Indian cities? The shopping malls are attracting hordes every weekend, but the luxury brands reckon these surroundings are still too plebeian.

The only refuge for these brands is in the five-star hotels of Delhi and Mumbai, where there's a glittering ambience to match the products on sale. But there are only so many five-star hotels to go round.

Some smart Indian entrepreneurs are about to solve this retail environment problem by opening what they call "luxury malls", which will house a mix of expensive Indian and foreign products.

How far will a socialite walk to buy her Jimmy Choos? And can you drive a Maybach down Delhi's chaotic streets where unscratched autos are a rarity? In this age of conspicuous consumption, it seems there's no dearth of rich Indians eager to join the global party.

* Paran Balakrishnan is associate editor of the Telegraph, Kolkata.