The global economic slowdown has led to a slump in demand for Indian art.
Confidence levels in the once-booming market for Indian art have dropped 63 percent since October as prices slide, according to a report published today by the London-based research company ArtTactic.
ArtTactic’s confidence index for Indian contemporary art alone declined even more, by 90 percent, during the same period. The indexes reflect the balance between optimistic and pessimistic art-market professionals. About a third of respondents believed the market for modern Indian art would rebound within two years. More than half thought demand for contemporary works would take between three and 10 years to recover, said the report.
‘‘Problems first appeared in September 2008, around the time of the Damien Hirst sale,’’ Anders Petterson, founder of ArtTactic, said in an interview, referring to the UK artist’s auction at Sotheby’s that raised 111.5 million pounds ($199 million at the time) and coincided with the collapse of Lehman Brothers Holdings Inc.
“The market has had six months to digest events. There has been a lot of art speculation in India and people see there’s nothing to hold these prices up any more.”
Art-investment funds have proliferated in India since 2006. In March 2008, some estimates valued the country’s art fund industry at $65 million to $75 million, though it could be as large as $250 million, said ArtTactic.
Demand for Indian art at auctions has slumped as the country’s economy is battered by the deepest financial crisis the world has experienced since the Great Depression. The International Monetary Fund said on April 22 that it expected India’s economy to grow 4.5 percent in 2009, compared with the 7.3 percent achieved last year.
Auction prices
India’s average auction prices for modern works have fallen 31.5 percent to $54,385 since March 2008, said ArtTactic. The average price of contemporary Indian art has dropped 72.7 percent to $13,827.
During the period March 2006 to March 2008, when names such as Subodh Gupta, Rashid Rana and Bharti Kher were included in international sales at Sotheby’s and Christie’s International, the average auction price of Indian contemporary works had almost doubled, said ArtTactic.
Indian artists marketed by western contemporary dealers have suffered some of the biggest price declines at auctions. At last October’s Frieze Art Fair in London, Gupta’s painting “Still Steal Steel #9” sold for 450,000 euros ($607,590). During the March auctions of Indian art in New York, the highest price achieved for a Gupta painting was $176,500.
Price points
“Western galleries got involved with Indian art at a high price-point and now they’re stuck with it. They’re going to find it difficult to discount,” said Petterson. “A lot of collectors thought it was an unstoppable trajectory. In fact, it’s going to be some time before we reach the bottom.”
Launched in May 2007, the biannual ArtTactic Indian Art Market Confidence Survey was based on responses from a sample of 82 Indian and international collectors, auction house specialists, dealers and art advisers.
“The Indian art market went up so high so quickly, particularly at auctions, that the repercussions were bound to be felt,” Conor Macklin, director of the London-based Grosvenor Gallery, said in an interview. “Younger artists who try to sell their works at 2008 prices are going to have a tough time.”
The Grosvenor Gallery, in collaboration with the New Delhi dealership Vadhera, is previewing a selling exhibition of more than 40 works by Indian modern and contemporary artists. Prices for modern Indian art have proved more resilient in the crisis, Macklin said, echoing the findings of ArtTactic. The Grosvenor show includes a 1962 painting of a woman’s head by the still-living “Bombay Progressive” artist Akbar Padamsee. The 4-foot-high oil work is priced at $500,000.
“This contraction is actually good for the market,” said Macklin. “It means new collectors can now afford to buy works that were just too expensive 12 months ago. And people will now look at the works as art, not just an asset.”
The author is a Bloomberg News columnist. The opinions expressed are his own
