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Indian art market has immense potential to grow
India is undergoing a dramatic socio-political engineering along with economic transformation. Keeping a close eye on the country’s rich past and an informed view to the promising future, the new-generation artists are proactively responding to the changes in an effort to examine the implications of incessant churning. Through diverse forms of expression and insightful perspectives they pose pointed questions about what it means to live, thrive or survive in present-day India.

Their dynamic works revolve around the current situation and its impact on the common people – a byproduct of skewed progress – facet that has brought contemporary Indian art into international spotlight. Inquisitive artists of today’s restless, resurgent India explore several pertinent questions like how does the globalised economy and market of the new millennium influence the socio-political spheres? How does it touch the common people’s life? What does the world expect from India as market and a thought leader as the largest democracy apart from US and China? Can the conflicts between consumerism and a streak of spirituality affect our tussle between culturally established mindset and current views?

Alongside the evolving art-scape, a new class of investors and collectors is continually evolving. Analyzing the scenario, writer Margherita Stancati had mentioned in The Wall Street Journal: “As India’s economy is growing, so is the portion of the population that can afford to invest in art. This means many buyers are actually new to the art market. As a result, the profile of collectors is changing too.” The process is almost two decades old, now…

“The expanding art market of India is fueled by an expanding middle class of the country with money to invest and a greater awareness of interior design in a country largely indifferent to aesthetics,” so mentions a 1990 news report (Hungering for Art in New Delhi) by Barbara Crossette in The New York Times, putting a question mark over the art market boom. Some of the questions still remain unanswered even today, though the growing affluence levels alongside India’s rapid rise as a major power has led to a new-found fascination for art in terms of its cultural and investment value. Significantly, the value of the modern and contemporary Indian art still represents just a fraction of the global share, which leaves immense scope for growth and expansion. It has immense potential since it’s undervalued in comparison to international art, albeit, catching up fast when it comes to quality, versatility and experimentation.

The world-renowned curator, Hans Ulrich Obrist of London’s Serpentine Gallery, also highlighted Indian art’s emergence as a major force on the international art scene! Echoing the sentiment, Dr Hugo Weihe, Christie’s Senior Vice-President & International Director (Asian Art), noted in an essay that the classical arts & miniature paintings have been collected for a long time in the West. But now the interest is awakening in India itself. The values still look ‘very reasonable’, looking at the longer term, taking into account the relative scarcity of the material still available. No surprise, despite the slowdown, the impending recession in Europe and the US as well as the steep correction in the market, art continues to attract a growing number of investors from within the country and outside.

Indeed, art as an asset class is on the verge on a smart turnaround trajectory. So what are the factors driving art market? It offers an element of diversification to core investment portfolios. The art market tends to have a low correlation with the movement of stocks, bonds and other instruments. As a result, it can be a low risk strategy compared to traditional asset classes. The concerns about the shape of global recovery are not fully erased. Extremely resilient against the prevailing economic uncertainties, especially the Indian art market is staging a strong comeback as a string of successful auctions suggest, with most top artists now quoting at the pre-crisis levels. Interest in quality works has revived with a growing number of collectors keen to enter the market, realizing there’s good scope for bargain-hunting.

When Christie’s first offered modern and contemporary Indian art as a single sale category in London in 1995, the sale took in just $613,837 at the exchange rate then. The category has grown exponentially since then largely because of an increasing amount of cross-fertilization and pan-Asian bidding and buying apart from the obvious interest non-resident Indians show in it. To add to this boom, a new investor class that values the ‘experience economy’ is turning to passion investing. Simultaneously, a sustained and collective push from prominent art auction houses, galleries and art institutions has laid the foundation for a solid secondary market.

On the flip side, India’s art scene suffers from lack of enough experienced curators and critics, art publications and documentation. There is no visible institutional and museum collecting/ viewing culture to deepen the roots of nascent art market. A majority of Indian buyers have probably been in the domain for not more than a decade or so. Obviously they are still in the process of learning about art & collecting. In spite of a vibrant art culture in India, the rather narrow collector base remains a worry for the art market. It has tremendous potential that still remains to be tapped.

Significantly, the new age collectors are focusing not only on the established masters but also on young and emerging artists, which has both its risks and rewards that need to be fully fathomed.

Though investor confidence in the art market is still a bit circumspect, the interest has certainly returned. Collectors worldwide are fervently participating in a series of Indian art auctions, making them hugely successful, to establish its global potential. They are treating the major sales as an opportunity to acquire some of the very best contemporary and classic works on offer, set to appreciate in the future.