Burberry, the British luxury brand, is poised to enter a joint venture to expand its presence in India, a market in which the ultra-rich are thriving because of a soaring stock market.

The 153-year-old company, best-known for its signature trench coats, plans to tie up with Genesis Colors, the Indian fashion retailer, and has applied for government clearance.

Burberry hopes to repeat in the sub-continent its success in China, where it operates 44 stores and is enjoying double-digit percentage revenue growth. Angela Ahrendts, Burberry’s chief executive, said: “Obviously, India is on a different curve, we only have about two stores there now, but I see the same growth potential.”

The company runs its two Indian stores through a franchisee arrangement with Media Star, an Indian group. That arrangement is set to be dissolved when the new joint venture is established.

Other British retailers, including Mothercare, the baby product retailer, have recently turned from franchise deals to enter joint ventures instead. It is thought that Burberry will invest £2.1 million for a 51 per cent stake in the venture, which hopes to open 21 stores across India.

This week the company reported a 19 per cent fall in operating profits to £86.3 million for the six months to September 30, beating analysts’ average forecast of £83 million, helped by cost cuts. The appetite of wealthy Indian consumers for western luxury brands is well established. Mumbai has one of the few shopping centres to sport a Rolls-Royce showroom — it is about a 30-minute drive from India’s biggest slum.

Last year, Stella McCartney, the designer, unveiled plans for six stores across the sub-continent — a bet on Bangalore’s fashionistas matching the profligacy of their peers in Moscow and Los Angeles. Analysts said that the move underlined how the centre of gravity in the world of luxury retail was steadily shifting east. India spent about £2 billion on luxury goods last year, according to AT Kearney, the consultancy, a sum that is expected to hit £15 billion in 2015.

It seems that the spendthrift maharajahs of legend have been replaced by a similarly status-obsessed middle class. India is the third most brand-conscious country in the world, trailing only Greece and Hong Kong, according to Neilsen, a research group.

Burberry’s move comes as a surging stock market has almost doubled the number of billionaires in India in the past year. Among those with reason to cheer is Mukesh Ambani, 52, the petrochemicals tycoon who heads Reliance Industries. The net worth of the sub-continent’s richest man leapt by more than 50 per cent to $32 billion (£19 billion), according to Forbes Asia.

The combined net worth of India’s 100 richest people was $276 billion, about a quarter of the country’s gross domestic product, the magazine said. The number of Indian billionaires rose to 52, from 27 last year.

Mumbai’s benchmark Sensitive index has gained 76 per cent this year and is heading for its best annual performance in 18 years, leading some to fear that another bubble is inflating. A year earlier, it fell by more than half, its worst performance on record.

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