The stores at New Delhi's MG1 Mall, one of India's best-known shopping stops for the well-heeled, were smashed on Thursday in a municipal drive against illegal buildings.
Designer Rohit Gandhi said: "We're completely in shock. It has been such a big setback. How are we going to concentrate on Fashion Week?"
The annual event, which is attended by international buyers, is due in April when designers show their ready-to-wear lines for winter 2006.
The swish strip, where more than 60 lifestyle shops were located, was the latest to be broken up in a campaign by municipal authorities to demolish more than 18,000 allegedly illegal buildings. A neighbouring mall, also a haunt of the rich and famous, is due to be demolished soon.
The legality of the malls are disputed between the Municipal Commission of Delhi which ordered the demolitions and the shop owners.
The commission says the malls are illegal while the shop owners say the commission is acting wrongfully.
Suneet Varma, another leading Indian design name, whose outlet was demolished, said: "None of us knew the buildings were illegal. All my business activities have come to a screeching halt."
The designers watched as the bulldozers moved in. Some weeping storekeepers waved letters which they said were from Delhi officials declaring their properties legal.
Delhi police empty the shopping
mall before its demolition
The municipal authority's drive to seal and raze buildings began in December after a court told it to demolish 18,271 structures which have sprung up illegally across the city.
India's clothing industry is estimated to be worth $12 billion, half of it exports to destinations including the US, Europe and the Middle East.
But the fashion design industry is still nascent and estimated to be worth just $50 million. It mainly caters to the domestic market and Indian stores abroad, but of late designers have started to get orders from international retail outlets such as Britain's Selfridges.