Tuesday, April 10, 2007

International Herald Tribune: India's art market booming

By Sonia Kolesnikov-Jessop

Thursday, January 25, 2007

(Above: An untitled painting done by M.F. Husain in the early 1960s was bought by an Indian collector at Sotheby's for $486,000)

In many ways, 2006 proved to be a difficult year for M.F. Husain, a 91-year-old Indian artist. In May, a London gallery closed his show early "for security reasons," according to The Daily Telegraph, after protesters sprayed black paint on two of his paintings that portrayed two Hindu goddesses in the nude.

Back in India, outrage over these and other paintings of Hindu deities has led to court summonses and warrants. Husain now describes himself as an "international gypsy," living mainly in London and traveling frequently.

Collectors were not always willing to pay these sums. As recently as 2000, Husain's work would have sold for less than $16,000. In many ways, his rise reflects that of the Indian contemporary art market.

The auction market for Indian art alone was worth $150 million last year, up from $52 million the year before, according to Sonal Singh, director of Bodhi Art, which is based in New Delhi and also has galleries in Mumbai, New York and Singapore.

In 2005, at a Christie's auction, Tyeb Mehta's "Mahisasura" sold for nearly $1.6 million, marking the first time an Indian contemporary painting crossed the $1 million barrier. Since then, a few other artists have joined the million-dollar club, among them F.N. Souza and S.H. Raza.

Until a few years ago, the main buyers of Indian contemporary art were Indians living outside India. But there has been a substantial shift since then, and now the majority of buyers of Indian art are based in India, according to Singh.

"With the Indian economy growing, there is a rapidly expanding middle class which now aspires to attain cultural and social status, part of which can be achieved by purchasing modern and contemporary art," she said, estimating that about 85 percent of buyers for Indian art today are local.

Arun Vadehra, director of a leading Delhi gallery, Vadehra Art, estimates the current size of the Indian art market at $350 million, up from $200 million in 2005. "This only reflects 1 percent of the world art market," he said.

But noting that India's gross domestic product is 4 percent of the world's GDP, he added, "I think the Indian art market still has a long growth period ahead of it."

The current craze has prompted the introduction of several funds investing solely in the Indian art market, with more expected later this year. Experts estimate that about 3 billion rupees, or $68 million, will be raised by funds over the coming months. Vadehra said he believed there was no sign of a bubble about to burst.

The introduction of these funds is "a natural outcome of any market maturing," he said.

Copal Art, which is based in New Delhi, has established two investment funds of two funds of 100 million rupees each and is hoping to start the country's biggest art fund by raising 1.5 billion rupees. It will join the ranks of existing art funds run by Crayon Capital, Edelweiss Securities and Osian's Connoisseurs of Art.

"When we launched our fund, the response was overwhelming," said Neville Tuli, chairman of Osian's, the first auction house in India. "The fund attracted 656 investors from 39 cities all over the country and about 128 applications were rejected as they came in past the closing date.

"Over 80 percent of the investors invested in art for the first time," he added.

The Osian's Art Fund raised 1 billion rupees, currently the largest art fund in India, and its portfolio focuses on what it calls historically significant artists like V.S. Gaitonde and Akbar Padamsee.

Some experts warn that the art scene in India has some way to go and that investors should pay attention to liquidity because the number of buyers is still relatively small.

"One should never get swept away by the herd instinct, and follow lists of 'who's hot and who's not,'" said Lindy Poh, an independent art curator based in Singapore.

"Not every piece made by an artist is regarded as a masterpiece or major piece," she said. "An art piece is not like any other investment. Art is illiquid, it needs maintenance, storage, security, and it doesn't give you dividends, bonuses or income."

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