New Delhi, April 4 -- Swiss luxury watchmaker Tag Heuer is riding India's growing middle class to bet that localized retail sales can offset a falling global appetite for high-end Swiss timepieces. The LVMH-owned brand plans to open boutique shops rather than rely on third-party distributors to shore up sales in a volatile luxury market.

As parent LVMH struggles with a profit slide, India's demand for Swiss watches has defied the downturn, surging more than 26% early this year. Tag Heuer, with its move into Noida this week, hopes that this will make India the leader across Europe, the Middle East, and Africa in five years.

The push stems from consumers increasingly preferring local boutiques to duty-free shopping trips. This 'buy-at-hom...