Indian art market valued at $350 million

So much has happened in Indian art in the last four years. Values have changed completely; Indian art has been noticed globally. It is said that there is a USD 350 million-art market now in India, but that of course is dwarfed by the market size in China, which is higher than USD 1.5 billion. But we are getting there and as far as the total auction market size goes, it has changed from USD 5 million in 2003 - just four years back - to nearly USD 150 million this year; that has been the scope and the extent of the rise in the Indian art market.

However, as with all bull markets, we need to take stock of the situation from time to time particularly so, because in the last few weeks and months, there has been a general sense of softness in the Indian art market with prices and the way the last few auctions have panned out. In the last one year, a lot of new money has come in; many people are wondering whether art prices can continue going up and how the market is evolving between modern masters and contemporary artists? Answers are not easy, because it is a nascent market. 

Dinesh Vazirani of Saffronart Gallery ,  Arun Vadehra , who represents Vadehra Art Gallery , Swati Piramal , an art collector, artists Akbar Padamsee and Baiju Parthan and Sumeet Chopra, art collector speak on what is happening in the Indian art scene.

Excerpts from CNBC-TV18's exclusive interview with Dinesh Vazirani, Arun Vadehra, Swati Piramal, Akbar Padamsee, Baiju Parthan and Sumeet Chopra:

Q: Over the last couple of months a lot of people have been wondering whether post Christie's, Sotheby's there is a certain kind of softness, which has come after four years of a run. Are you sensing any kind of softness in the Indian art market?

Vazirani: There has definitely been a consolidation; we have seen in the last four years a very rapid escalation of prices and have also seen a buyer base, which has grown by leaps and bounds. I think the entire market now is digesting what has happened in the last four years. We have seen the top-end prices stabilise. In fact the highest price ever achieved in Indian art was in September 2005, where Tayab Mehta sold for USD 1.58 million in New York. Since then, of course there have been about 20 paintings that have crossed a million dollar mark but none has surpassed that high of 2005.

What has happened is that the buyer base is got adjusted to this price level and it is taking stock, like you said what has happened and at the same time there is a gestation period between new buyers coming in at those price levels and buyers in the past who have got used to it. So, yes there has been a consolidation, a bit of breather in the market.

Q: What is your perspective sitting there in London? Do you think the market is softening out a bit or is this just a gentle consolidation and sideways phase, which will again result in another breakout?

Vadehra: My take is that the market is very strong. A whole lot of non-Indian buyers are in the market. Especially in the Hong Kong auction we had as much as 60% sold to non-Indian and finally the prices is normally achieved by a great quality painting. Let us not forget that Tayeb Mehta Mahisasura, which tests USD 1.6 million was a top quality Tayeb Mehta and thereafter as Dinesh mentioned we have achieved a million dollar for 20 odd paintings, but sadly there is no great painting, which has come into the market in the last two years. I can pinpoint the paintings if they were to come into the market they can make an excess of USD 3-4 million too. So I think the market is very strong.

Q: From an industrialist and a collector's perspective what is your take on how prices have moved in the last couple of years and where they stand today?

Piramal: I think prices have gone up astronomically; buy a painting one year and next year its value by the same artist is nearly double. So, for collectors it is quite difficult but the other side of that is that the collectors have begun to go directly to the artist and getting younger artist thinking, buying what they like, buying what is beautiful and then that goes up later. So that is an investment.

Q: Coming from the collector's perspective what is your sense, because in the last few weeks there been a bit a buzz in the market with the cover of the Sotheby. The Gaitonde did not sell and a whole lot of worlds from masters did not sell in a couple of the global auctions. Would you say candidly that the market has gone a bit soft?

Chopra: I am going to disagree a bit with what Dinesh and Arun have to say; consolidation means if the prices move in a band of about 5-10% up and down, but in these recent auctions we have seen 30% fall, down from the highs of last year. I definitely do not think it is a consolidation right now; I think the market has softened, it has softened to 2005 levels. So it has definitely softened and probably will soften little more before it starts getting better.

Q: Can you give us some examples of the 30% price correction that you spoke about? Which artists and just illustrate your point?

Chopra: We saw Shibu's, whose big canvases were available last year at Rs 65-70 lakh, which has gone down to about Rs 45-50 lakh and even that is a difficult sell; and that is on the top of my mind. Ganesh Roy, who use to sell at Rs 30-35 lakh for canvases, is down to about Rs 22-23 lakh and there are lot more. I can't put my figure on to it right now, but definitely the market has softened for sure.

Q: As an artist and an important contemporary artist are you sensing that because prices have pretty much moving one way over the last two years?

Parthan: In a way, from an artist's position, one is little confused the way the prices go up because it invariably affects how you relate your work. One hears that the prices have sort of stabilised or softened but from my position I think it is like almost in a race, one stopping and catching one's breath situation. I think it would stabilise and then be little more of a discerning buying will happen and much more of a quality conscious buying will come in - that is what I feel.

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