GENEVA: Swiss watchmakers are increasingly turning their sights towards India thanks to a new free trade agreement that is due to gradually open the doors for luxury timepiece exports. While some brands are already in the starting blocks, others are waiting to see whether India will become a new land of plenty. “India represents enormous potential,” Yves Bugmann, president of the Federation of the Swiss Watch Industry, told AFP at Watches and Wonders, the Geneva watch fair that closed on Monday.

Despite its 1.4 billion population, India was in 22nd place for Swiss watch exports in 2023, just ahead of Switzerland’s Alpine neighbor Austria. The value of Swiss watch exports to India was just 218.8 million Swiss francs ($239.4 million) - way behind front-runners the United States (4.2 billion francs), mainland China (2.8 billion francs) and Hong Kong (2.4 billion francs). High taxes have long discouraged watch brands, particularly the most expensive labels. Although the calculation is complex, it includes customs duties of around 20 percent for watches, a goods and services tax of 18 percent, plus an additional surcharge.

‘New El Dorado’?

But last month, after 16 years of negotiations, the European Free Trade Association (EFTA) - Switzerland, Norway, Iceland and Liechtenstein - signed a free trade agreement that will reduce customs duties “progressively over a period of seven years”, Bugmann explained. “It’s an extremely interesting market, but will this be the new El Dorado of the watch industry? We don’t know yet,” he admitted. In a study published in mid-October, the audit firm Deloitte estimated that Swiss watch exports to India could exceed 400 million francs by 2028. And it could climb into the top 10 export markets within a decade thanks to its ultra-high net worth individuals, as well as its growing middle class.

With the EFTA agreement, “we are feeling things beginning to move”, Karine Szegedi, the report’s author, told AFP at the Geneva salon. “Seven years is already tomorrow,” said Edouard Meylan, the chief executive of H. Moser, a small brand undergoing an expansion, where the average watch price is around 40,000 francs. “We sense a tremendous appetite”, and “you have to be the first to establish yourself”, said Meylan.

He has already teamed up with a local distributor and is hoping to open a store in New Delhi this year, “before Diwali” - the Hindu festival of lights, which will be celebrated this year from the end of October into early November. Thierry Stern, the president of Patek Philippe, said India would be increasingly on the radar, but would “especially interest brands that produce large quantities”, he told AFP. Patek Philippe produces 72,000 watches per year - a small number for a big-name brand, which therefore has long waiting lists and sees its timepieces go for millions of dollars in auctions.

“I don’t have enough (watches) already,” said Stern, so “today for Patek Philippe, it would be almost impossible to open in India”.

“However, Patek Philippe’s clientele travels a lot,” he added, with many Indian customers already coming to Geneva or London to make purchases. The Genevan brand Raymond Weil, which has already been active in India for several years, welcomed the EFTA agreement, which it said would facilitate its business. “My grandfather was particularly fond of this market,” said Elie Bernheim, who represents the third generation at the helm of the family firm.

His grandfather began growing the brand’s presence in India from the 1980s onwards, meaning it has built a “good reputation” over time. The country now represents five percent of the company’s turnover. “I really believe in this market,” said Bernheim, who presented a 3,500-franc watch at the Geneva salon, Swiss watchmaking’s flagship annual event. With its head start, the brand is not afraid of seeing new competitors arrive, especially given the potential size of the market. — AFP