How has the art market fared over the last year? Even as reports of a revival in morale and spending have brought cheer and an air of optimism, there has been a decline in the overall growth of the market in 2017. What accounts for this, and can the anomaly be explained?
The art market, which had taken a tumble following the economic crisis of 2008, had plateaued before beginning a slow rise to the same levels that it took almost a decade to achieve. A global parallel to this does not exist, since Western (and Chinese) markets were quicker to recover (but have seesawed), and where the growth in the contemporary market has been staggering. In India, on the other hand, the contemporary market has almost faded away and accounts for as little as 5 per cent, almost too minuscule to even take into consideration. This has put the pressure on the moderns, and prices here are rising. But is that the only reason for the growth of the market?
Auction houses and art dealers point to the rising buying power of a younger generation who are beginning to collect for the first time, and while they may not yet be making trophy acquisitions, they are curious and interested and engaged with the market. A market that “understands” art is most likely to be a stable one, and it is here that the cautious, questioning arrival of younger collectors is to be welcomed. But — and this, again, is a departure from American and Chinese markets — Indians are not buying art as an investment. Stung by the market fall and art funds from a previous generation, they are less likely to be taken in by punters in what is an unregulated market. But India’s population of high net worth individuals has been rising steadily (219,000 in 2017, up from 156,000 in 2013), creating a new audience and buyer base for art.
According to a KPMG-FICCI visual arts market report released recently, the Indian art market grew from Rs 13.5 billion in 2014 to Rs 15.9 billion in 2015, dipping by a bit in 2016 to Rs 15.6 billion, and somewhat more in 2017 to Rs 14.6 billion. The fall is easily explained. While most would assume that it was on account of demonetisation as well as the introduction of the cumbersome goods and sales tax — and these have had an initial adverse impact on the market in 2017 — but one bit of the market’s decline is on account of Christie’s moving out of India and the dropping of its December auction which contributed a sizeable bit to the overall
market. Demonetisation impacted the December sale in 2016 and, in 2017, Christie’s pulled the stop on its India auction completely. In 2017, therefore, one can see a decline in the market share of auction houses vis-à-vis galleries, where it is assumed that 40-45 per cent of art sales are contributed by auction houses, with galleries and art dealers making up the slightly larger component.
If the contemporaries were 5 per cent of the market in 2017, and the moderns 88 per cent, the rest of the total was made up of antiquities and classical art, including miniature paintings. This is a segment that has enormous potential and is hindered only by government regulations. These percentages have remained more or less the same over the last few years, showing that the market segmentation is unlikely to change any time soon. The moderns, therefore, will continue to command the market in the foreseeable future.
Kishore Singh is a Delhi-based writer and art critic. These views are personal and do not reflect those of the organisation with which he is associated