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The Indian art market: Present and the future
Asian artists and buyers are keeping the international art market afloat. Fueled by the strong economic parameters, the growth in this dynamic region has been accompanied by increasing interest in more traditional Indian art forms, as well as the continual growth of modern and contemporary art, mentions a recent report in The Independent, UK. Highlighting a rising international attraction and appreciation for the quality works of Indian and South East Asian artists, Jonathan Stone, regional managing director of Christie's Asia, states: "Demand from Asia continues to lead the global recovery of the auction market and to drive the growth in 2010.'' After becoming the second-largest category at Christie's worldwide in 2009, Asian art now represents more than 15 per cent of our sales.''

Collectors are fervently participating in a series of Indian art auctions, making them hugely successful, to establish its global potential. They are treating the sales as an opportunity to acquire some of the very best contemporary and classic works on offer, set to appreciate in the future."What's amazing about the contemporary art market is how totally global it has become over the last five years," stated Simon de Pury, chairman and chief auctioneer at Phillips. (The Business Week; August 2010). The report mentioned: “The art market always follows the money. These days that means courting new collectors from emerging economic superpowers.”

A section of buyers remain wary, though. Echoing the cautious sentiment, Sharmistha Ray wants to know whether it was all happening too soon. “A shallow market is much more susceptible to predatory speculation, a lesson we should have learned well by now. If ever we needed the voice of reason, it’s now,” the expert observed in an essay.

In fact, buyers still remain divided over how fast the market should catch up. Seasoned collectors in Europe and the US still seeking potential bargains, represent a bit of skepticism prevailing out there. But they are facing greater competition from new enthusiastic Asian bidders more willing to splurge. Providing the broader picture, Kelly Crow of The Wall Street Journal (WSJ) revealed in a report: “So far this year, the clash in attitudes - one cautious, the other giddy - has created an unpredictable marketplace in which artworks tend to fly or flop without warning!” The apparent shift of power from the western world to Southeast Asia was starkly evident at The Frieze Fair 2010. A greater influx of buyers from the erstwhile Soviet Union and Asia marked the event. With their newly acquired wealth, collectors/investors from Brazil, Korea and India were out there in full force.

Art sales in Hong Kong and Dubai have climbed up, too. A recent Gulf News story underlines how Dubai’s throbbing art scene is reaching a new peak. Based on interviews with experts and gallery owners, writer Fatma Salem noted that ‘Art is the new business trend’, as investors are looking at safer alternative investments beyond stocks, currency, gold, and property, in today’s volatile market. It’s just the beginning of a booming period of unprecedented art investment. Summing up the scenario, analyst Kishore Singh mentioned in a personal column (‘Back on its feet; The Business Standard): “For some time until the economy (and the art market) crashed in late 2008, drawing room conversations tended to centre not so much on art as much as investment in art. There was nothing intrinsically wrong if a set of investors wanted to treat it like any other tradable commodity; media attention focused unfortunately only on prospective returns.

Now that the economy is back on track, things are looking up. Though investor confidence in the art market is still a bit circumspect, the interest has certainly returned. What’s interesting is that investors/ collectors aren’t really rushing in to buy with the herd-like mentality typical of the pre-2008 phase. Those drifting back into the market appear determined to control their investment. This time they are asking the right questions, such as:
• What are long-term prospects of the art market?
• How much should one ideally invest annually?
• Who can act as an impartial guide in the investing process?
• How is short-term liquidity situation?
• How to get rid of weak assets to acquire blue-chip artists?
• How does one enhance the value of portfolio?

Importantly, ArtTactic’s latest market confidence report gives a thumbs-up to Indian modern art, albeit remaining a tad cautious about the contemporaries. The analyst firm’s Indian Art Market Confidence Indicator has witnessed a good recovery largely been on the back of strong recovery in the secondary/ auction market for Modern Indian art. In May 2010, the Indian Art Market Confidence Survey had pointed to further recovery, with the overall Confidence Indicator increasing 26%. The gap in confidence between the Modern and the Contemporary art market though had widened. Respondents were concerned that the fast recovery and the bounce-back in valuations would again attract speculators to the in the Modern Indian art market.

Compared to 6 months ago, the market participants are feeling marginally less positive about the current Indian art market. The Current Indicator came in at 57, down from 61 in May 2010. However, the short-term outlook, measured by the Expectation Indicator stands at 66, implied that the respondents expect a positive market development in the next 6 months. That sums up the overall optimism prevailing in the Indian art market.