Mumbai, Feb. 17: Indians are not spending; they are splurging.

There are 1.6 million households in India that are splashing out as much as Rs 4 lakh a year on a fistful of baubles and brands. The hot purchases? Jewellery, clothing, digital accessories, timewear and cosmetics and skin care.

These households, with an earning of over Rs 45 lakh or more a year, will treble to 3 million in the next five years, says a study on luxury goods spending carried out by KSA Technopak.

The study presents a four-deck Indian Affluent pyramid: 1 million luxury households, 6 to 7 million Very Affluent, 9 to 10 million Mid Affluent, and 14 to 15 million Upper Middle Class. It also classifies the luxury households into four attitudinal segments: The Arrived, The Actualised Ascetic, The Climbers and The Laggards (See chart).

According to the KSA-Technopak study, this category has the potential to give rise to market worth Rs 65,000 crore and grow by 14 per cent.

But who are these new generation affluent? Beyond the traditional ?rich?, the new entrants include CEOs and other senior professionals in their thirties and early forties, new-age entrepreneurs in different businesses like technology, manufacturing, services, and small and medium retailers.

The study suggests that the impact of the purchasing power will be felt in the next two to three years itself with initial categories of interest being men?s clothing, jewellery, handbags, watches, gourmet food and wines. As high as 27 per cent of the luxury spent will be on jewellery, followed by clothing (16 per cent), digital accessories (13 per cent), times wear (8 per cent) and cosmetics and skincare (8 per cent ).

But at the same time, the study also sounds a note of caution. Most of the people in the luxury segment may not, however, be customers for Cartier, Louis Vuitton or the Gucci?s of the world. Why? ?Currently the priorities are very different. More importance is given to housing, travel, education and higher end automobiles,? says the sudy.

The profile of the Indian luxury consumer has also undergone a change. He is primarily a city dweller, with a disposable income of more than Rs 8 to 9 lakh, residing in posh localities and owns mostly a D or E segment car like a Skoda or a Honda Accord.