Where The Sari Meets Chanel

Trailblazing designer Diane Von Furstenburg is credited with introducing the wrap dress to the world, but the Indian Subcontinent's sartorial innovation, the sari, was the original wrap star. Today, thousands of years after its debut, the sari is still seen in various incarnations all over India, from the marble-clad ballrooms of Mumbai's five-star hotels to the overgrown fields of rural villages. Silk or cotton, dyed, beaded or embroidered, this simple wardrobe solution is a trend with the kind of staying power that contemporary retailers kill to come upon; millions of variations on a theme later, customers are still queuing up.

But recently, the Indian style scene has witnessed the arrival of a stranger in its midst: the high-octane socialite clad in, say, a couture chiffon evening gown instead of an elaborately embellished sari. Chanel. Vuitton. Gucci. Dior. Moschino. Burberry. Fendi. Versace. Armani. The Western luxury-brand fleet has begun to flock to the latest stop on the emerging-market circuit, and it's out to steal market share from India's treasured national dress. In the humid streets of Mumbai, the sense of potential is palpable. Research estimates peg the total annual Indian luxury market at about $3.5 billion, and predict it will exceed $30 billion by 2016. No wonder luxury-goods conglomerates are looking to join the party.

It's not as easy as it sounds, however. Amid all the hubbub about profit margins and growth models, some of the challenges of catering to Indian consumers have been swept under the Armani Casa rug. Oppressive import taxes aside, how does one market seasonal collections built around layers of wool in a country where most regions never see a true winter? The luxury game has always been about engineering desire, but it's nearly impossible to motivate women to buy a cashmere coat in 30-degree-Celsius weather.

And how does a couturier persuade Indian women, who love bright palettes and body-conscious silhouettes, to adopt ensembles that have more to do with clean lines and muted colors than cling or bling? India's pre-eminent style setters are Bollywood stars, and Aishwarya Rai is much more likely to appear on screen draped in a skimpy, ravishing chiffon sari than in a beige crepe pantsuit from Jil Sander.

One solution is to focus on accessories, which are the bread and butter of the luxury business the world over. No matter where we live, we all apparently share a desire for vertiginous footwear and a panoply of "it" bags, despite their stratospheric prices. In Chanel's New Delhi boutique, classic purses with signature double C's, ranging from $1,270 to $7,630, are in hot demand. At Louis Vuitton, a house known for its emphasis on painstaking craftsmanship, it's not just the store collection that is selling in India; custom orders for such things as branded birthday-cake boxes, mammoth trunks painted with royal crests and one-of-a-kind turban cases are being placed with the specialorders divisions in each store. India's new maharajas, the business tycoons who are flying high in their tricked-out Gulfstream jets, are indulging in Vuitton's customized Tourbillon watches, which can reach upwards of $730,000.

These heavy-duty imports might signal a red flag for conservatives, wary of cultural colonialists supplanting national traditions. But Indian women aren't giving up the sari any time soon. At Ensemble, one of the country's most famous high-end fashion boutiques, customers are buying stacks at a time. Designer saris range up to about $2,000 apiece, and bejeweled custom styles, often worn to weddings, can run as high as $6,350.