India and Mexico could become new drivers of growth for the Swiss watch industry‭, ‬which has been clobbered by US tariffs and slumping demand in China‭, ‬top audit firm Deloitte said Wednesday‭. ‬The emblematic Swiss industry‭ ‬“is navigating one of the most complex periods in recent memory”‭, ‬the professional services giant said in the 11th Deloitte Swiss Watch Industry Study‭.‬

Watchmaking‭, ‬the wealthy Alpine country's third-largest export sector‭, ‬was rocked when the United States‭ ‬-‭ ‬its largest market‭ ‬-‭ ‬imposed 39‭ ‬per cent tariffs on Swiss products in August‭.‬

Furthermore‭, ‬exports to mainland China‭ ‬-‭ ‬the other major market for Swiss watch manufacturers‭ ‬-‭ ‬continue to decline‭, ‬with demand hit by youth unemployment and turbulence in the real estate market‭.‬

According to figures from the Federation of the Swiss Watch Industry‭ (‬FH‭), ‬exports to the United States last year amounted to 4‭.‬4‭ ‬billion Swiss francs‭ ($‬5.5‭ ‬billion‭) ‬-‭ ‬up five per cent on 2023‭.‬

Exports to mainland China were at two billion francs‭ ‬-‭ ‬down 26‭ ‬per cent‭. ‬Karine Szegedi‭, ‬Deloitte Switzerland's consumer‭, ‬luxury and fashion chief‭, ‬said the industry should seize opportunities in other countries where growth is booming‭. ‬“Tapping into new growth regions is crucial as a way of cushioning declines in established markets‭,‬”‭ ‬she said‭. ‬“Countries like India and Mexico are a source of young‭, ‬dynamic customers‭. ‬These customers are open to innovations‭, ‬giving the Swiss watch industry the opportunity to expand its global presence in the long term‭.‬”

Deloitte had already identified India as a market with high potential for watchmakers in its 2023‭ ‬study‭. ‬Since then‭, ‬Switzerland‭ ‬has signed a free-trade agreement‭ (‬FTA‭) ‬with India‭, ‬which came into force on October 1‭, ‬expected to facilitate the Swiss watchmaking industry's access to India's growing middle class‭.‬

This year's study noted the‭ ‬“strong domestic demand‭, ‬rising affluence‭, ‬and active investment in retail infrastructure”‭ ‬in India‭. ‬The study also shone a light on Mexico‭ ‬-‭ ‬a country Switzerland signed an FTA with in 2021‭. ‬Since then‭, ‬watch exports to Mexico have increased fivefold‭, ‬with the country‭ ‬establishing itself as the leading market in Latin America‭.‬

Deloitte said watch enthusiasm in Mexico was being driven by social media‭. ‬India‭, ‬however‭, ‬remains the industry's fastest-growing major market‭.‬

FH figures showed Swiss watch exports to India were up 25‭ ‬per cent last year at 274‭ ‬million francs‭, ‬while exports to Mexico were‭ ‬up 16‭ ‬percent last year at 337‭ ‬million francs‭.‬

But while growth in these countries offers promising prospects‭, ‬rising sales will not be enough to entirely offset the impact of‭ ‬US tariffs and the slump in exports to China‭, ‬Deloitte said‭. ‬Mexico was the Swiss watch industry's 15th-biggest market last year‭, ‬and India the 21st‭. ‬ -‭ ‬AFP

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