The new generation of 'old money' is a sophisticated lot – they have schooled at Harvard and Wharton, Cambridge and London Business School. What is most interesting about them is that despite their immense international exposure, they retain Indian nuances. They do samosa s and chai as effortlessly as they do wine and cheese.

The 'nouveau riche' set, on the other hand, is new to luxe. The newly prosperous in India – a product of India's liberalisation of the ‘90s – include entrepreneurs from fields as diverse as IT and pharmaceuticals, as well as wealthy farmers from states like Punjab. Not all of them are in a hurry to acquire luxury, though. There are entrepreneurs like Infosys founder NR Narayana Murthy who travels economy-class despite heading a highly successful IT business, and there are others who symbolise “high living, limited thinking” – like the rich classes from Haryana, Punjab and Delhi, for whom the price of possession is a tool to brand themselves in society.

Unlike the wealth of the ‘old money' set, new money in India is not necessarily sophisticated. Understanding of the product or brand is not important – what is, is the bling tag. A $4,000 Gucci bag, which will brand its possessor immediately to society at large, is what will speak. This is especially true of Delhi society, where showing off has always been the rule of consumption.

How does India compare against luxury shopping stops like Dubai and Hong Kong? Does the higher duty structure affect sales?

Import duties and tax structures are certainly difficult in India, which translates to higher prices for Indian consumers. However, what is significant is that luxury products are not any cheaper in other Asian markets. On average, the price of a luxury product in Japan is about 40 per cent higher than in Europe. In China, it is about 25 per cent more than, say, in Paris. Ultimately, it boils down to market characteristics – consumer education, evolution and retail spaces that draw in the aspirational sets to take home a piece of that luxury. Whatever the price.

What is your take on luxury retail spaces in India?

Ironically, it's a case of water, water everywhere, but not a drop to drink! None of the 350-odd malls that will be operational in India by the end of this year, have the necessary class and ambience for luxury retailing. India's high streets are not available and are, in any case, tacky and chaotic.

Space developers need to understand that luxury brands always like to be in control of their environments. A good example is presented by how Ashish Chordia, the entrepreneur behind the super-luxurious Thanks multibrand store in Mumbai, went as far as to extensively touch up the store's immediate neighbourhood and landscape it into a driveway and a swank valet parking facility.

For the short term, at least, five-star hotels are the answer. However, there are no five-star properties in India which offer the volume of space to house a differentiated luxury retail ‘zone'. Which is why, a luxury brand does not have a specific retail destination in India to target. In New Delhi, for instance, Valentino is open at the Shangri-La hotel; Louis Vuitton, Hugo Boss and Bulgari are at The Oberoi; Mont Blanc and Aigner are at Maurya Sheraton; and Chanel sits in solitary splendour at The Imperial.

Now, contrast this with China's current environment. There are highly defined luxury retail addresses. The Palace Hotel in Beijing, Three on the Bund, or the Plaza 66 in Shanghai, all have large-enough tranches of retail space to house scores of luxury brands in a much-differentiated ambience.

Again, you must remember this – China's luxury retail business is well over a decade old. They were in pretty much the same state as India is now, as far as retail space was concerned. The market has evolved in the intervening years, and so have the retail spaces, education, discernment… everything.

India's retail scene is looking up. DLF is opening Emporio, a 300,000 square feet luxury mall in New Delhi's Vasant Kunj area anchored by Saks Fifth Avenue, while the Citywalk Dome – also in New Delhi – aims to top a premium-end mall quite literally with a dome housing luxury brands – it has signed up Ferragamo, Ferretti and Aigner, among others.