(By Nalini S Malaviya)
Recent results from international auctions and subsequent media reports seem to indicate that the Indian art market may be slowing down to some extent. Indian art has witnessed a phenomenal growth in the last few years where prices soared to astronomical levels over time. Media hype and global recognition along with a huge demand for contemporary Indian art further fueled the market. However, recently, there have been reports of poor quality works from the top bracket of Indian artists and that is attributed to be one of the reasons for the slump. Another factor could be that buyers and investors have become more discerning. Armed with sufficient knowledge on art, and an eye for quality they have become more astute in their dealings. Investment Banker Anil Nayar feels a strong economic boom has contributed to the hype in Indian art. He adds, “we are following China in every way. So while their art is now a USD1.5 Billion market, ours is just 350 million. Price corrections are a part of any market. It does not necessarily indicate a reversal of the long term trend, but is more technical in nature.” Any lowering of price will make the long-term investors happy. Also, this could be a wake-up call to artists to create quality works and refrain from mass productions. Anil Nayar adds, “The corrections allow people sitting on the sidelines to enter at a lower level with better margins of safety and thus helps future holding power. Good thing about Indian art is that it is in its infancy, and collectors are typically wealthy individuals with lots of holding power. So, the corrections will be driven by middlemen and gallery owners. They will want volatility and corrections in order to be able to add to their inventory at lower prices.” Whose prices are likely to be effected? Responses are mixed while, some investment analysts’ feel that mid-level artists will be affected the most, a source in Bangalore believes prices for the top level of artists will come down whereas new and upcoming talent will continue to sustain themselves. The Indian art market is still young and these temporary lulls are unlikely to create long-term setbacks. It won’t be long before the market stabilizes itself.
(Published in Finacial Times)