The Arts Market in India has Grown Manifold over The Past few years. But Unless more Professionalism is brought in, The Benefits will only Reach a Chosen few
“I am deeply ashamed and sorry for my actions,” said Lawrence B. Salander in March 2010 to a judge after confessing that he duped tennis star John McEnroe and many others of $120 million through “bogus art investments.” In October 2010, another American James Mobley was sentenced to five years in federal prison for selling art work purportedly made by Picasso, Dali, and Chagall. On March 24, 2011, the Mexican government confirmed that a Mayan art piece sold for $4 million was nothing but a fake. These in general summarise the pathetic state of the art industry globally, what to talk about India.
It is said that original art, artefacts and paintings that have recognised names behind them are generally independent of currency and economic cycles. Moreover, from the consumer’s point of view, antiques & arts could become an alternative investment proposition as well in terms of status symbol. But the art industry will never be able to reach respectable level in sales unless this industry brings in place extremely stringent processes and rules to ensure that the incidence of fraudulent transactions is done away with. To the benefit of the Indian art market, thankfully, some corporate houses are developing a hitherto hidden penchant for artefacts & paintings. And this penchant actually goes beyond being mere connoisseurs to taking an active business interest. Instances of the same include Godrej Group, RPG Enterprises and Emami Industries. Their interest is not without reason. With a robust economy, a new moneyed class and the energetic participation of young expats, Indians are boosting sales of contemporary Indian art to new highs. Buyers, mostly, comprise the blue eyed boys of India Inc., who buy the work for personal consumption and have no intention for further business with those works. For instance, the collections of Jerry Rao, Chairman of MphasiS BFL Ltd., are visible in the company’s offices worldwide.
The excitement for most of such collectors is palpable in the decor at their homes & offices; and as such, they really don’t focus on proper pricing or on proper insurance. No wonder, apart from public insurance companies, there’s just one insurance company (Tata-AIG), which works on insuring art work. As a result, an adequate pricing mechanism for these masterpieces is yet to be done in India. “I am the best person to decide prices of my paintings, but mostly, my decision is below the market price,” feels Husain.
In addition, trading of art objects in India has been limited to just two metros (New Delhi & Mumbai) and mainly through auction houses. “Most of the time, these auction houses do not have the right basis of valuation and it lacks professionalism,” feels Surajit Hari – a leading photographer, who has done his exhibitions in cities like London and Cairo. Not only that, as per Delhi-based Indian Art Gallery, there are cases where art objects sold in auction houses are sourced from stolen properties.
“I am deeply ashamed and sorry for my actions,” said Lawrence B. Salander in March 2010 to a judge after confessing that he duped tennis star John McEnroe and many others of $120 million through “bogus art investments.” In October 2010, another American James Mobley was sentenced to five years in federal prison for selling art work purportedly made by Picasso, Dali, and Chagall. On March 24, 2011, the Mexican government confirmed that a Mayan art piece sold for $4 million was nothing but a fake. These in general summarise the pathetic state of the art industry globally, what to talk about India.
It is said that original art, artefacts and paintings that have recognised names behind them are generally independent of currency and economic cycles. Moreover, from the consumer’s point of view, antiques & arts could become an alternative investment proposition as well in terms of status symbol. But the art industry will never be able to reach respectable level in sales unless this industry brings in place extremely stringent processes and rules to ensure that the incidence of fraudulent transactions is done away with. To the benefit of the Indian art market, thankfully, some corporate houses are developing a hitherto hidden penchant for artefacts & paintings. And this penchant actually goes beyond being mere connoisseurs to taking an active business interest. Instances of the same include Godrej Group, RPG Enterprises and Emami Industries. Their interest is not without reason. With a robust economy, a new moneyed class and the energetic participation of young expats, Indians are boosting sales of contemporary Indian art to new highs. Buyers, mostly, comprise the blue eyed boys of India Inc., who buy the work for personal consumption and have no intention for further business with those works. For instance, the collections of Jerry Rao, Chairman of MphasiS BFL Ltd., are visible in the company’s offices worldwide.
The excitement for most of such collectors is palpable in the decor at their homes & offices; and as such, they really don’t focus on proper pricing or on proper insurance. No wonder, apart from public insurance companies, there’s just one insurance company (Tata-AIG), which works on insuring art work. As a result, an adequate pricing mechanism for these masterpieces is yet to be done in India. “I am the best person to decide prices of my paintings, but mostly, my decision is below the market price,” feels Husain.
In addition, trading of art objects in India has been limited to just two metros (New Delhi & Mumbai) and mainly through auction houses. “Most of the time, these auction houses do not have the right basis of valuation and it lacks professionalism,” feels Surajit Hari – a leading photographer, who has done his exhibitions in cities like London and Cairo. Not only that, as per Delhi-based Indian Art Gallery, there are cases where art objects sold in auction houses are sourced from stolen properties.
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Source : IIPM Editorial, 2011.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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