Over the past decade, the Indian art market has gone through an unprecedented period of rapid and exponential growth - dramatic price appreciation in modern and contemporary art, increased exposure and engagement with the international community, a flourishing gallery scene, and solid auction results.

Indian artists have begun to be represented by top-notch international galleries, world renowned museums have curated shows of Indian modern and contemporary art and every new auction sets records for Indian art. This raging boom seemed unstoppable until of course the recession brakes were applied and the art market – much like every other industry – was forced to readjust its values. Top end art saw a much smaller fall, but mediocre quality, highly inflated art began to see a free-fall, creating nervousness and some unwarranted panic.

However, in my opinion, this has all been a healthy development for the Indian art market. It allowed us all to take a step back, recalibrate, separate the wheat from the chaff – good art from the less-than-great art, readjust and regroup before we move on.

Summer auction round-up

The results from the recent auctions at Sotheby’s, Christies and Saffronart have been encouraging, with a total of almost $7.7 million (excluding buyer’s premium) worth of art being sold in the summer sales. This is a substantial rise from March 2009 when the aggregate of the three auctions was just a whisker under $5 million, although this is still almost 65% lower than summer 2008 when the total art sold at the three auction houses was $21.4 million.

The highest selling work this summer has been F.N Souza’s ‘Orange Head’ (estimated at $130,000-$200,000) fetching a whopping $658,628 at Sotheby’s. Also at Sotheby’s, Jogen Chowdhury’s ‘Day Dreaming’ (estimate $130,000-$200,000) sold for $610,000, establishing a world record for the artist. M.F Husain’s ‘Ragamala Series’ sold for over $600,000 at Christies. At Sotheby’s, six out of eight lots by M.F. Husain, sold at or above the high estimate. (Please see box for Top 10)

Although the summer auctions indicate a reversal of the negative trend, this signals a mild recovery. After a dramatic drop in average auction prices for modern and contemporary Indian art, the market has somewhat strengthened, with confidence returning. However, these are early days of a recovery and conditions continue to be ideal for long-term serious collectors and buyers to be aggressive in the market. Good value opportunities present themselves as we still remain closer to the bottom, but in recovery mode.

It is important to note that the art market does still risk the possibility of a galloping increase in prices again, which could lead to a double-dip. Therefore, for the market to build itself a solid foundation and see less volatility, it must continue to rise at a steady pace, attracting stable, long-term collectors. This will ensure that we enter a substantial growth phase, allowing for the market to mature, collectors to become more discerning and prices to reflect the quality of art.

Maithili Parekh is Deputy Director at Sotheby’s, focusing on Indian Art and Business Development for Global Indian Communities, having previously worked with Indian art galleries in Mumbai and New York. Maithili has studied Art History and International Relations at Brown University, USA. Prior to her involvement in the art world, she worked on Wall Street at Morgan Stanley.