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“A cultural controversy: High fashion takes inspiration from traditional Indian craftsmanship.” Image by Prada.

Why Even Global Luxury Brands Can Get India Wrong: A Lesson for Investors

by Michael Lamonaca 21 July 2025

As investors, we often get excited about emerging markets and the potential for massive growth as a middle class expands. India, with its colossal population and burgeoning affluence, seems like a no-brainer for global brands, especially in the luxury sector. But what if even the biggest names in the world are missing a crucial piece of the puzzle, and what does that mean for your investment strategy in these markets?

It’s easy to look at projections (like India’s luxury retail market potentially doubling to $14 billion by 2032) and see dollar signs. However, the recent controversy involving Italian luxury giant Prada and its “Kolhapuri chappal”-inspired sandals offers a deeper lesson. This isn’t just a fashion story; it’s a window into the complexities of cultural appropriation, market misjudgment, and the vital role of ESG (Environmental, Social, and Governance) factors in a brand’s long-term success.


The Prada Misstep: A Case Study in Cultural Neglect

The controversy ignited when Prada showcased a toe-braided sandal in Milan that strikingly resembled the Kolhapuri chappal—a handcrafted leather shoe with centuries of heritage from Kolhapur, India. The problem? Prada’s collection didn’t credit its origins. This omission sparked a significant backlash, highlighting a recurring issue where global brands are accused of drawing “inspiration” from Indian (and broader South Asian) traditions without proper acknowledgment or compensation.

Prada’s quick response—acknowledging the sandals’ origins, opening a dialogue for “meaningful exchange with local Indian artisans,” and even hinting at future collaboration—was a rare example of a major brand stepping up to rectify such an oversight. This incident follows similar debates involving brands like Reformation and H&M over South Asian garment inspirations, and Dior’s recent criticism for using traditional Indian mukaish embroidery without mention.


Beyond Inspiration: The Ethics (and Economics) of Credit

Some argue that designers constantly draw inspiration globally, and it simply spotlights diverse aesthetics. However, critics, including Shefalee Vasudev, editor-in-chief of Voice of Fashion, emphasize that any borrowing must be underpinned by respect and acknowledgment, especially when powerful global brands repurpose these ideas for incredibly high prices. “Giving due credit is a part of design responsibility,” Vasudev states, adding that failing to do so is “cultural neglect.”

For investors, this isn’t just an ethical debate; it has economic implications. Brands that disregard cultural sensitivities risk:

  • Reputational Damage: Social media can amplify backlash globally, quickly eroding brand trust and loyalty, which are crucial assets for luxury goods.
  • Consumer Alienation: A growing segment of consumers, particularly younger and more ethically conscious demographics, are highly attuned to issues of cultural appropriation and fair practices. Alienating them can impact sales and market share.
  • Legal Challenges (Potentially): While direct intellectual property protection might be complex for traditional crafts, increasing scrutiny could lead to new regulatory pressures or consumer actions.

India’s Luxury Market: The Reality vs. The Hype

Despite the controversies, India’s luxury market is often seen as a significant growth opportunity. Analysts predict it could nearly double to $14 billion by 2032, fueled by a growing affluent middle class. Global brands are eyeing India to offset weaker demand elsewhere.

However, not everyone shares this optimism. Anand Bhushan, a fashion designer from Delhi, and Arvind Singhal, chairman of Technopak, point to a key issue: most global luxury brands still don’t perceive India as a truly significant market for high-end fashion. Despite new luxury malls, footfall can be low for names like Prada. “Names like Prada still mean nothing to a majority of Indians,” Singhal argues. “And this is simply not enough to build a business, making it easy to neglect the region altogether.”

Historically, India has been a production hub for luxury goods, with artisans contributing to expensive pieces sold in Paris and Milan. This dichotomy — India as a production powerhouse but an overlooked market — creates tension when brands lift designs without understanding their historical context.


Bridging the Gap: What Investors Should Look For

The issue, according to Nonita Kalra, editor-in-chief of Tata CliQ Luxury, stems from Western-based brands often viewing global consumers through a “foreign lens,” a “lack of diversity” within their organizations. She suggests that genuine love and respect for Indian heritage exist, but without diverse teams, blind spots are inevitable.

For investors considering luxury brands or companies operating in global markets, this means looking beyond simple growth projections:

  • Authentic Engagement: Does the brand genuinely engage with and understand the cultures it draws inspiration from, or does it simply extract?
  • Diverse Leadership & Teams: Companies with diverse teams are often better equipped to navigate cultural nuances and avoid missteps.
  • Ethical Sourcing & Fair Practices: Beyond design, how are artisans compensated? Are their intellectual property rights considered, especially for traditional crafts? This feeds directly into supply chain transparency and ethical sourcing concerns that impact a brand’s resilience.
  • Long-Term Market Strategy: Is a brand truly committed to developing a market like India with tailored strategies, or is it just a peripheral focus? A long-term, respectful approach is more likely to yield sustainable returns.

The Prada controversy, though specific to fashion, underscores a broader lesson for all investors: understanding a company’s approach to culture, ethics, and diversity isn’t just “nice to have”; it’s a critical component of risk management and identifying truly sustainable growth. It pushes us to demand better accountability from brands and also encourages local markets to recognize and protect their valuable heritage.