"It is amply clear that Indian men in non-metros continue to seek power and status to validate their position in life, just like their urban counterparts.
"While non-metro women are happily indulging themselves, encouraged by the exposure to international fashion and fascinated by the easy availability of hitherto inaccessible luxury products, they seek high fashion and style and are ready to pay for it," CII said.
While globally the Indian market is the 5th largest consumer, its share in luxury segment is yet to capture the top 50 for most categories.
Research was conducted in tier 2 & 3 cities like Chandigarh, Ludhiana, Kanpur, Coimbatore, Bhopal, Patna, Kochi and Rajkot.
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However, it found that Indian women are a cautious group with just a couple of designer handbags to ensure just the right impression in society.
"The small town woman still carries her cultural baggage along with her new found modern and semi westernized identity.
"However, despite this, luxury brand communication in India is very imagery and celebrity-led, except in categories like automobiles," it pointed out.
In the tier 2 and 3 cities surveyed, luxury automobiles have the highest penetration, followed by apparel for women and accessories for both sexes.
Electronic gadgets like mobiles and home electronics also have a reasonably high penetration.
In keeping with what we saw as the psychological characteristics of the consumer in these cities, men tend to need to signal their power or status that is possibly best done through automobiles which by sheer size and presence is hard to miss, even on crowded roads.
Men's watches too, are a category often portrayed as signals of power, heritage and opulence, thus fitting in with the need for social signaling, whereas men's apparel even in metro India is yet to get into the luxury sphere with any intensity.