No market is immune: India

When Mumbai recently came under terrorist attack, India’s art market had only just begun to contemplate the economic crisis. The signs had already started to appear—at a Sotheby’s Hong Kong auction in October, a painting by Indian golden boy Subodh Gupta failed to sell, when only six months earlier another of his works had passed the $1m mark.
Many galleries have been quick to exercise damage limitation. Bodhi Art, one of India’s biggest galleries, is rumoured to have offered 40% reductions to clients and many of the other galleries on the international fair circuit are reported to have made reductions of at least 20%. “We are making deals like everyone else,” says Peter Nagy of New Delhi and Berlin gallery Nature Morte. “The collectors are still there but there are a lot more negotiations over prices.”
The crisis has seen some people keen to liquidate art assets. “A year ago people couldn’t get enough work. They would buy two copies of everything because it seemed like money in the bank,” says Farah Siddiqui of FSCA gallery in Mumbai. “Now people are desperately trying to sell works at cost price or even lower.”
The crash and subsequent correction of prices was the main topic of recent presentations given by market analyst ArtTactic, which in October showed a 34% point fall over the past year in its Indian Art Market Confidence Index.
While the perception has been that the Indian economy has fared less badly than Europe or the US, the Forbes Asia Rich List reported recently that India’s 40 richest people had seen 60% shaved off their wealth. However, it has become something of a trade mantra that a genuine passion for art will transcend economic uncertainty.
Perhaps the biggest question mark hangs over the future of the art funds at the forefront of the investment-based buying that has fuelled the market boom. Funds like Osian’s, Crayon Capital, Yatra and others have accounted for many of the top sales of recent auctions. While this might suggest problems in the future, the well-managed funds have put down strong foundations and continue to insist that blue-chip Indian art will hold its status as a valid asset.
Periods of correction and market depression are by no means a discouragement to the buying of art and dropping prices mean that bargains are to be had. Those buying for investment tend to look towards more established and critically validated work. Thus in Saffronart’s recent online auction on 11 December the progressives and moderns performed best while younger contemporary artists were treated with more caution. The auction did far better than Emami Chisel’s Kolkata auction a month earlier, which made only a third of its estimated value and sold only 50% of lots.
It may take some time for the reality of the situation to emerge. There is no doubt that many bullish voices from within the trade are hoping to maintain confidence through optimistic forecasts, and yet it seems likely that the optimism is largely warranted. “Everyone knew that a correction was needed,” says Mr Nagy. “There is every chance that it will do a lot of good, not just for the market, but for the development of the art scene from the bottom upwards.”