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Indian art market valued at $350 million

July 04, 2007 15:12 IST

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 $350 million-art market now in India, but that, of course, is dwarfed by the market size in China, which is higher than $1.5 billion.

But we are getting there and as far as the total auction market size goes, it has changed from $5 million in 2003 -- just four years back -- to nearly $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 :

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 $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.

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's Mahisasura, which tests $1.6 million was a top quality Tayeb Mehta and thereafter as Dinesh mentioned we have achieved a million dollars 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 $3-4 million too. So I think the market is very strong.

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.

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.

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.

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.

Would you consider lowering prices in the context of the market right now, or hasn't it come to that yet?

Parthan: If I speak about myself, I would say that the prices I deal with the galleries are not prices, which of course come in the market. So I think it doesn't affect me directly at all. In that case, gallery prices always tend to go little higher than what I offer.

Looking at the history of the art market is there a pattern of cyclicality in the market and when we talk about corrections, do prices corrects significantly? Have you seen instances of that in the past or prices simply plateau off before new peaks are reached?

Vazirani: Historically, if you look at the world art market, it is highly cyclical, not only cyclical. We have seen the world art market in the 90s, which went through a very sharp downturn, especially when the Japanese collectors stopped buying art. So yes, the market is cyclical and it will go through cycles.

What I disagree with is, trying to judge a very young market and where the prices have gone by five years with a two-month event. I think our horizon has to be longer to make judgments as to where the prices are going. I think you need a series of events over a period of time to make that judgment. But historically, the art market is cyclical and the Indian art market will also follow the same trajectory.

Do you think it is just a two-month period and there might have been good reasons why the last couple of auctions have not done as well as some of the preceding auctions or do you think prices indeed have gone up too sharply and they need to correct for Indian art?

Vadehra: My personal opinion is that first, it really depends upon the quality stocks that the auction houses get and the fact that the buyers have become more discerning, they are getting far more matured is a fact and that is good for the market. Second, the art market has been historically very harsh on a whole lot of artists, because if you really see only 10-15% of the artists survive in terms of art historical context.

So, to that extent if you give an example of one or two artists that they have gone down by 20-30% it is not fair. It just maybe that, the pehnomenon that applies to investing in capital, applies to young artists as well; you really do not know what is going to happen in the coming years. But as I said, the art market is very harsh that way; so you need to have a great discerning eye to buy good art and to have your investments go up that way.

What is your sense? Is it the point that Arun is trying to make that may be good quality works have not come up in the auctions, which is why they have not done well, or at the secondary market level you can genuinely sense some resistance at these prices and they are started correcting?

Chopra: We have to understand the psyche of the Indian art buyer. I would say 85% of the buyers that have come in now, in the last three years two years, are buyers who are wanting to buy art and flip it over six-eight months later. There is s whole plethora of India housewives kind of concept and they become art traders and they want to go to galleries buy art and at time flip it out.

This kind of trading in art is what is going to make difficult for it to sustain because, I do not think it is possible to be able to flip out art in six-eight months and if these guys do not get a chance to make their money and move out, there is going to be a lot of pressure that is going to come into this market. I totally believe that and I am not saying that all artists are going to go down. It is sure that you are going to have people with great quality works, which will keep going up.

Coming to the auctions, guys who are handling auctions - there have to be quality control from their side. They cannot say quality is not very nice in the auction; that is why the market is not going up or that is why the prices have corrected.

They are the guys who decide the kind of stuff that come into the auctions. So I think the quality situation is going to be handled by the guys or should be handled by the guys who are having these auctions and if the quality is not up to the mark do not take it into the auction. That is a choice they can absolutely make.

Please respond to that because it has been a complaint that maybe a couple of the catalogs were a bit weak this time round. Why is it that great quality works have not found their way into the last couple of auctions?

Vadehra: I have been in London for the last one week and this week has been a significant one for the world art market. There have been two back-to-back auctions by Christie's and Sotheby's of modern Indian art and we had seen people like Matisse, Picasso, Degas not in these auctions.

So, number one in terms of the quality it is hard to control the quality from an auction house perspective, because we offer works and it is sometimes difficult to refuse a work of a master on the grounds of quality because first, who is making the judgment of the quality. Second, if we do give back the works, the market may further lose confidence.

How are you approaching this situation? You have made an interesting point that you have given up buying the masters, because prices have sky-rocketed and you are now looking at younger artists. Do you find the same debt, quality, attraction in the contemporary universe, or the younger universe that you are beginning to track?

Piramal: I have been listening to the conversation and I think buyers are becoming much more sophisticated.

In the past, the only known gallery was Jehangir at that time but nowadays people are look and buying, being themselves in touch with artists, commissioning artist, getting themes for what they want and they are becoming much more aware, they are also becoming much more aggressive in buying and I disagree with this house wife idea, I know many of my friends do come and try and sell but the buyers are becoming so sophisticated, they read, they go to auctions, they watch online, the whole internet revolution has changed and I honestly think that buyers are much more aware than what people think.

Could that be one reason why some of the works are increasingly finding it difficult to get sold because earlier people just bought out name of an artist but right now if the quality of the work is not good they are probably not purchasing some of those works?

Piramal: Yes and also what is happened is that when the prices are so high there are certain level of artists who are cranking out stuff and many of that is not of the best quality and so buyers have to look at not just the name but quality of the painting and as I said buyers are becoming more aware, the whole market is becoming more mature than it was ever in the past.

We know of prices per sq inch of paintings, we go online, we look at catalogues, we read more on the subject and the artist, and we also go online to auctions worldwide, so there is a change in buyer behaviour than ever before.

Do you sense the point that Swati made that partly it could be the pressure of prices moving up and the pressure on the artists to deliver quickly and deliver a lot of work has become essentially far more prolific that has played any kind of role in the way prices have moved in the last few months?

Parthan: I don't think so. Maybe some artist are doing that sort of production line they might have but ultimately I think it's the quality factor what is playing a major deciding role.

One can define quality in various ways when we take the larger picture. An artist like Susa--- is important because of the art historical context within which he operates.

So even a work, which is not that of high caliber, quality would fetch a very high price because he is a very important artist but when you come to the younger generation that would invert, because we still haven't worked out where each one of them stands in the larger picture and their the individual works quality matters a lot and their I think the production practices some of them might be adopting might backfire, all the works may not be of that caliber in that sense and so in that sense I agree.

There has been the same point, which is being raised about the masters, forget contemporary artists. People talk about Jogen Chaudhary the ease with which and the amount he is producing and that might have some role to play in how his market has been for the last few months, would you agree that some of these people are producing too much work for the market to absorb?

Vadehra: You have got a point; some of the artist can become market victims, to that extent they may produce but then this will be short-term phenomenas.

If you see the Picaso produced about nine works in a day in his later days and at that particular time the market was affected of Picaso but over a longer period of time the market was okay, master of masters to that extent that will hold true and what Baiju just now said that from art historical point of view some of these works who seem quite indifferent right now may become historically very important.

We been discussing why prices of some of the modern masters might be easing a bit. Do you think that the market is softening up a bit and what could be the reasons you would attribute to such a softness if any?

Padamsee: I would not be concerned if the prices go; I am concerned with my own work. I am not at all interested the price if they go up fine, if they come down fine. It doesn't concern me.

Is it not true that though that artist like you have also been raising their prices consistently over the last two-three years?

Padamsee: No, this is false. One of the reasons why I keep increasing my prices is to a selling because when the prices were low everybody wants to buy and then I have no paintings. So to stop selling I bring my price up that's the only reason for bringing prices up so that people can't buy it and only few people who can buy should buy it otherwise I do not want to sell.

That is a strange thing for an artist to say. I am sure that you produce so that other people can enjoy your work but you seem to be reluctant to sell?

Padamsee: I do not paint for people. I paint for myself and I paint for art.

Your prices would have gone up some 10-15 times in the last three years I imagine. You are saying that it is only because you want to keep buyers away?

Padamsee: Yes, when the price is at a certain range then lots of people want to buy it. I keep increasing the price so that there are fewer people to buy because (1) I am not a very productive painter. I do only a panting or two per month, which means about 20 paintings a year and so many people come to buy. The only way to a buyers is to keep the prices up. That is a practical way of pricing your work. We do not price to sell; we price not to sell.

Do you find that some of these issues like maybe being too prolific, etc, might have been one of the reasons why some prices are beginning to ease off even for some of the modern masters?

Vazirani: There are several reasons and I want to come back to a point that was discussed little earlier, which I think Swati brought up, which was a kind of sophistication of buyers and the buyer base actually being little more educated. If you just analyze and see what has happened in the last five years, you had a market which had a mix of collectors and investors the purpose investors are there is to buy art and like Summet said its turned them around quickly.

By a sophistication of a buyer you mean a buyer who has actually taken the time to build in eye for art to learn about it, to understand what goes into the esthetics of art instead of financial. W

hen that buyer base is changing from that investor pool which is buying art to resell to one that is taking its time to purchase art you are going to see prices slowdown little bit because of the readjustment of this buyer base which one wants to collect when we see a Mark Rothko selling to a hedge fund manager internationally at $70 million the person is not buying it only because of an investment they have actually taken the time because they want to own the painting, hang it on the wall, live for it for a long period of time and if the price goes up and they have kind of out crown the painting they might sell it.

So I think if there are more works even artists like you said if they are prolific in the market it is going to affect the market because the market today is that investor pool and that investor pool is really changing to a collector pool and that takes time and during the time it take for that to happen there is going to be cooling off. When the readjustment happens.

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